SanDisk jumps 500% on $93.9B multi-year contracts

SanDisk has gained about 500% this year after announcing multi-year customer agreements with a minimum total contract value of $93.9 billion. The deals involve eight data-center customers, including three U.S. hyperscalers, and are expected to cover 67% of the company’s bit shipments in fiscal 2028.

Under the new business model, SanDisk commits to deliver specified product volumes over multiple years while customers commit to buying those volumes. Pricing in the contracts can include fixed and variable components and includes financial guarantees to protect the company if customers do not meet purchase obligations. The company’s fiscal 2026 10-K states these agreements are expected to become the predominant way it does business, improving revenue predictability, production planning and supply assurance while not eliminating demand, market or execution risks.

The agreements are expected to cover about half of SanDisk’s bit shipments in fiscal 2027 and two-thirds in fiscal 2028. Chief Financial Officer Luis Visoso wrote that the contracts include pricing floors and ceilings, with floor pricing supporting gross margins of around 80%, providing greater visibility into future volumes and profitability.

SanDisk extended a long-running manufacturing partnership with Kioxia Holdings, maintaining their joint venture framework at Kioxia’s Yokkaichi plant in Japan through December 2034. The alliance has operated for more than 25 years and allows the companies to jointly develop flash technologies and produce wafers. Together they account for roughly 33% of global wafer production. The company attributes part of its capital efficiency to research and development and the reuse of manufacturing tools, which can reduce incremental capital requirements when scaling output.

SanDisk and SK hynix developed a high-bandwidth flash standard aimed at high-context AI inference workloads. SanDisk says the technology can deliver eight to 16 times more memory capacity at a given bandwidth. The company has completed the design of its first HBF chip, with a product launch planned for 2027 and mass production expected in 2028. Major cloud and AI firms including Alphabet, Meta Platforms and Tenstorrent have expressed support for HBF; Nvidia’s adoption is pending. SanDisk’s fiscal 2028–2030 revenue projections, which target a mid-to-high-teens compound annual growth rate, do not include potential HBF contributions.

On valuation, SanDisk trades at a one-year forward EV/EBITDA multiple of about 6.3 times, compared with a peer average near 4.1 times. Lynx Research set price targets of $2,450 for SanDisk and $1,325 for Micron and noted that recent extreme volatility had eased while institutional buying had become more deliberate.

Company filings reiterate that exposure to demand swings, market conditions and execution challenges remains. Market participants will monitor how SanDisk converts the contracts into sustained profitability, scales HBF production if adoption grows, and manages capital needs through its partnership model.