5. Sandisk Corporation (NASDAQ:SNDK)
Market capitalization: $162.04 billion
Forward P/E: 3.85
Expected forward revenue growth: 102.14%
Number of hedge fund holders: 128
Flash Memory Delivers Numbers That Demand a Second Look
Sandisk Corporation (NASDAQ: SNDK) reported fiscal first-quarter 2027 revenue of $11.031 billion, up 378% year over year and 23% from the previous quarter. The October 29 release also showed an adjusted gross margin of 85.1% and adjusted earnings of $49.51 per share, before the announced stock split. Data center revenue reached $4.802 billion, up 61% sequentially. Those figures put enterprise demand firmly at the center of the story, even if many consumers still associate the brand with memory cards and portable storage. For investors looking at cheap semiconductor stocks, the supplied forward earnings multiple is striking. The essential follow-up is whether the earnings underneath it represent a durable business level or an unusually profitable stretch.
Longer customer commitments form an important part of management’s answer. On the earnings call, executives described partnerships covering approximately half of fiscal 2027 storage-bit output, with the proportion rising to roughly two-thirds in fiscal 2028. These arrangements can improve planning and reduce exposure to purely short-term purchasing decisions, although contract terms and future pricing still matter. The company generated approximately $5.7 billion in adjusted free cash flow during the quarter and spent $5 billion repurchasing shares. Chief executive David Goeckeler pointed to “technology leadership, deep customer partnerships, and disciplined financial management.” The investment case therefore extends beyond a favorable selling-price environment: management wants investors to see a business developing longer relationships and returning substantial cash while demand remains strong.
The next-quarter outlook called for revenue between $12.2 billion and $12.6 billion and adjusted earnings of $55 to $57 per share on a pre-split basis. An eight-for-one stock split is scheduled to become effective on November 19, with split-adjusted trading expected on November 20. That makes each share less expensive in nominal terms while leaving proportional ownership unchanged; cutting a cake into more slices does not enlarge the cake. Our interpretation is that the more consequential issue remains cash generation across the memory cycle. A 3.85 forward P/E may signal a bargain, but it can also reflect investor concern that current profitability will prove difficult to maintain once supply and demand become less favorable.
Ranking rationale: Sandisk Corporation (NASDAQ: SNDK) ranks fifth with 128 hedge fund holders. It has the lowest supplied forward P/E in the group at 3.85 and expected revenue growth above 100%. Its position follows ownership counts, while the investment debate centers on the durability of NAND pricing and exceptional margins.
