Sandisk Corporation SNDK is seeing strong growth in its data center business as rising artificial intelligence (AI) demand increases the need for high-capacity storage. The company is benefiting from higher demand for enterprise solid-state drives (SSDs), which support AI infrastructure and data-intensive workloads. In the fourth quarter of fiscal 2026, data center revenues reached $2.98 billion, up 103% sequentially. For fiscal 2026, data center revenues rose 437% year over year to $5.15 billion. Data center also became Sandisk’s fastest-growing end market, accounting for 38% of its bit portfolio at the end of fiscal 2026 compared with around 12% a year earlier.
Sandisk is expanding its product portfolio to address the rising demand for high-capacity storage. The company began shipping its QLC Stargate platform during the fourth quarter. This platform complements its compute-focused TLC enterprise SSDs by supporting high-capacity AI data lakes. Sandisk is also developing High Bandwidth Flash, which could help address the growing storage and memory requirements of AI inference. Management expects the NAND market to exceed $300 billion in 2026 and approach $500 billion in 2027. It also expects data center demand to grow faster than the overall market in 2027.
To support future demand, Sandisk is building longer-term relationships with major customers through its New Business Models. The company has signed agreements with eight data center and edge customers, with a weighted average duration of more than four years. These agreements are expected to cover more than 50% of Sandisk’s bits in fiscal 2027 and approximately two-thirds in fiscal 2028. Such commitments provide better visibility into future demand and help the company plan production and investments. Management also expects customer demand to remain strong through the end of 2027 and into 2028.
Data center growth is therefore becoming an important driver of Sandisk’s business. Strong demand for enterprise SSDs, new storage technologies and long-term customer agreements could support further growth. If AI infrastructure spending continues to increase, the data center business could remain a major growth opportunity for Sandisk.
SNDK Faces Tough Competition
SNDK faces stiff competition from Micron Technology MU and SK hynix SKHY, which are also benefiting from rising demand for memory and storage products used in AI data centers.
Micron expects strong demand for memory to continue through 2028, supported by growing server shipments and the adoption of agentic AI. The company noted that more than 75% of its fiscal 2027 shipments are committed, reflecting strong customer demand. Micron also expects tight market conditions to support pricing and margins through 2028. In NAND, the company expects the market to remain tight as demand grows, while its continued transition to ninth-generation NAND is expected to support cost-effective supply.
