Aug 06 2026 JefferiesLLC StrongTractionwithNBMsbutEarningsMomentumSlows

USA | Semiconductors Equity Research SanDisk August 6, 2026

Strong Traction with NBMs but Earnings TARGET | ESTIMATE CHANGE

PRICE $1,350.50^ Mixed print as strong June execution was offset by only an in-line September $1,750.00 ($3,000.00) | guide. Investor focus will center on moderating pricing, lower GM guidance, and PRICE TARGET | % TO PT +30%

whether Edge inventory builds create a NT headwind to bit growth. All that said, 52W HIGH-LOW $2,354.39 - $40.53

NBM momentum continues to build with 8 customers signed and >50% of F27 FLOAT (%) | ADV MM (USD) 93.1% | 20,773.20

and ~67% of F28 bits already committed. We look forward to SNDK Analyst Day MARKET CAP $212.0B

next Thursday (08/13) in NYC. TICKER SNDK

^Prior trading day's closing price unless otherwise noted. Delivered another strong quarter in June but the only in-line September outlook likely tempers investor enthusiasm in the near-term. Management guided NAND revenue growth to a soft y/y decel vs. June on expectations for more modest growth in both bits and ASPs. Edge remained the Cal CHANGE TO JEFe JEF vs CONS largest $ contributor to Jun/q growth, up nearly 400% y/y and reaching 61% of revenue. As outlined in our preview, we think it's likely these are aggressive inventory builds that will eventually transition REV +2% -14% -1% -12% into headwinds over the coming quarters. We maintain that Data Center will be the primary growth EPS +4% -14% +3% -10% engine going forward, but it's reasonable to expect a more modest bit growth outlook as the story plays out. GMs also guided lower as the impact of lower GM LTAs offset favorable pricing 2026 ($) Q1A Q2A Q3 Q4 Cal dynamics and raises the question of what GM SNDK use in its updated operating model. All that EPS said, the company continues to make meaningful progress with its "New Business Models" or PREV NBMs, expanding the program to 8 customers across DC and Edge with more than 50% of F27 and ~67% of F28 bits already committed. Management also outlined an increasingly constructive industry outlook, forecasting the NAND market to exceed $300B in C26 before approaching $500B in C27. Looking ahead, we believe next week's Analyst Day represents the next meaningful catalyst Figure 1 - Results and Guide JUNE RESULTS SEPTEMBER

as management provides greater detail on High Bandwidth Flash, its updated technology roadmap, $M Reported JEF Est Consensus Revenue $8,965 $8,144 $8,479 Q/Q 51% 37% 42%

and the long-term AI storage opportunity. Y/Y Gross Margin 372% 84.6% 328% 80.3% 346% 79.6% Operating Expenses Operating Margin 79.2% 74.3% 72.6% Net Income $6,162 $5,257 $5,446 June Beat driven by Strong Data Center & Edge: June revenue ahead at $8.97B (+51% Q/Q, vs St. EPS (ex-ESO) Share Count $39.25 157 $33.27 158 $34.96 156

$8.48B) with ~1/3 of sequential growth driven by volumes and ~2/3 by pricing, implying lower bit $M Guidance SEPTEMBER GUIDE JEF Est Consensus

shipment growth of ~13% (vs St. +16%) and slightly better ASP growth of ~33% (vs St. +31%). By Revenue $10,550 $10,347 $10,815 Q/Q 18% 27% 28% Y/Y 357% 348% 369%

segment, Data Center revenue grew +103% Q/Q to $2.98B, tied to continued strength in TLC eSSDs Gross Margin Operating Expenses 84.0% 530 83.8% 498 78.2% 564 Operating Margin 79.0% 78.9% 73.0%

with initial contributions from the BiCS8 QLC Stargate platform. Edge revenue increased +48% Q/ Net Income EPS (ex-ESO) $6,975 $45.00 $7,070 $44.60 $6,920 $44.72 . Share Count Q to $5.43B, benefiting from rising average capacity and richer configurations across the mobile Source: Company Reports, FactSet, Jefferies Research

and PC markets. Consumer revenue declined -32% Q/Q to $556M as higher pricing impacted the consumer market TAM, and pricing realization lagged the pace seen in enterprise markets. Gross margin reported well above at 84.6% (vs St. 79.6%), benefiting from better pricing and favorable mix. Opex came in below at $484M (vs St. $596M), driving OM well above at 79.2% (vs St. 72.6%). All in, EPS came in much better at $39.25 (vs St. $34.96).

Blayne Curtis * | Equity Analyst |

FY (Jun) 2025A 2026E 2027E 2028E Crawford Clarke, CFA * | Equity Associate | EPS Andrew Buller * | Equity Associate Cons. EPS | Rev. (MM) 8,929.0 37,182.0…