Tremendous Q4 Plus Raised Guidance Couldn’t Stop Sandisk From Falling 9%
Posted On Aug 06, 2026 by Grayson Cavern
Sandisk Corporation (NASDAQ: SNDK) couldn’t have asked for a much stronger finish to fiscal 2026. Fourth-quarter revenue jumped 51% sequentially to $8.97 billion, GAAP diluted earnings per share reached $43.97, and management forecast another step higher next quarter with revenue expected between $10.3 billion and $10.8 billion. The board also expanded its share repurchase authorization by $14 billion, capping a fiscal year in which revenue soared 175%.
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Wall Street shrugged as the stock sank 9.14% after the report, stretching a pullback that has already erased hundreds of dollars from the share price since July’s high near $2,300. That reaction came despite 84.6% gross margins, operating income rising 71% from the prior quarter and net income climbing 91%. By almost any traditional measure, Sandisk delivered exactly what investors spend years waiting for.
Maybe that’s the problem.Memory stocks have spent decades teaching investors that spectacular quarters rarely stay spectacular for long. Sandisk is asking the market to believe this one belongs in a different category, and judging by the selloff, that case is still a work in progress.
Memory Companies Don’t Get The Benefit Of The Doubt
Semiconductor investors have seen this movie before. NAND manufacturers enjoy a few spectacular quarters as prices climb, profits explode and optimism returns, only for excess supply to creep back into the market and send margins right back where they started. That’s why memory stocks have historically traded as cyclical businesses rather than durable compounders.
Taken together, those updates read less like a company celebrating another upcycle and more like one trying to convince investors that the next downturn won’t look like the last.
Ten Contracts Tell A Bigger Story Than One Quarter
Beneath Sandisk’s record Q4 earnings was a disclosure management seemed almost as eager to highlight as the financial results themselves. Since April, the company has signed five additional New Business Model (NBM) agreements, bringing the total to ten, including three with entirely new customers and two expansions of existing relationships, while simultaneously telling investors that roughly two-thirds of sequential revenue growth came from pricing rather than higher shipment volumes. Those aren’t the statistics companies usually emphasize after posting the strongest quarter in their history, which makes the choice itself worth paying attention to.
Memory manufacturers have spent decades living at the mercy of spot prices, where today’s shortage often becomes tomorrow’s oversupply, yet Sandisk appears determined to convince investors that its future will depend less on that cycle and more on long-term commercial relationships. The company has already received billions of dollars tied to these NBM arrangements – so much that it now strips those prepayments out of adjusted free cash flow – and keeps returning to them because they represent something far more valuable than another quarter of exceptional pricing: a business built around customers making commitments before the next pricing cycle ever begins.
One Quarter Couldn’t Undo A 20-Year Reputation
After nearly quadrupling from around $600 earlier this year to a peak above $2,300 in July, the stock entered the results already carrying enormous expectations, making Wednesday’s 9.14% decline look more like a reassessment of what comes next than a rejection of what just happened. The selloff also arrived as the shares continued trading below both the declining 20-day and 50-day moving averages, reinforcing the idea that momentum had already begun cooling before the earnings release.
Even so, the broader structure remains intact, buyers stepped in almost exactly where the rising long-term trendline intersects the $1,000 area, producing a sharp rebound that has carried the stock back toward $1,200 while keeping it comfortably above the 200-day moving average near $867. No conclusive evidence that investors are abandoning ship yet, all they are asking now is for the company to prove that record margins, extraordinary pricing and a new commercial model can survive the next turn in the memory cycle.
Escaping Commodity Status Takes More Than One Quarter
Turning a commodity business into something investors value differently doesn’t happen in ninety days, no matter how extraordinary the quarter looks. Sandisk still operates in a memory market where every surge in pricing has historically been followed by a painful correction, and that’s why Wall Street erased more than 9% from the stock despite record revenue, record profitability and guidance that points even higher. Investors have learned, often the hard way, that one spectacular cycle doesn’t necessarily become the next normal.
What makes this quarter different isn’t that Sandisk produced exceptional numbers. It’s that management spent as much time showing how those numbers were produced as it did celebrating them. Pricing, customer commitments, New Business Model agreements and a datacenter business growing far faster than consumer flash all point toward a company trying to make its next record quarter look less like a cycle and more like a business model. Whether Wall Street eventually agrees is still an open question, but for the first time in a long time, Sandisk has given investors something more durable than another memory boom to debate.
Today’s editorial pick for you
UBER Stock Options Offer an Intriguing Proposition for the Gambler
Posted On Aug 10, 2026 by Joshua Enomoto
Uber Technologies (NYSE: UBER) isn’t exactly what you would call an enticing investment opportunity based on its current-year performance. Since the beginning of the year, UBER stock has dropped by almost 14%. Fundamentally, you would have to imagine that challenging economic circumstances have not aided the bullish thesis. Still, there might be an opportunity to extract quick profits through options.
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At the time of writing, UBER stock trades hands at $70.47, with afterhours trading suggesting a modest decline to about $70.31 for Friday’s open. Ultimately, I’m seeing a positive volatility cluster that may offer an outside chance of UBER reaching $73 by the Aug. 21 expiration date — or about a 3.6% move from Thursday’s close.
First of all, what do I mean by a volatility cluster? Essentially, the price discovery process in the equities market is rarely orderly and linear. Instead, a ticker like Uber Technologies stock could see modest day-to-day moves, then swing sharply higher on certain sessions. A great example is an earnings report. Generally, you’re going to see a massive volatility cluster around a material financial disclosure.
Now, the ride-sharing giant has already disclosed its second-quarter results, leading to a sizable leap in UBER stock following a positive print. Of course, the sentiment from that Q2 report has been digested. What I’m suggesting is that another circumstance — specifically an order flow imbalance — could lead to another positive volatility cluster.
To be fair (and I need you all to pay attention here), the proposition is risky. Strangely enough, I’m going to demonstrate that the core trading idea I’m about to present features a negative expected value. Basically, this means that if you place a wager on this transaction across multiple parallel universes, you’d likely end up losing money.
However, I’m also going to demonstrate that among the rational debit spreads, the idea that I will propose is arguably the most efficient trade on a relative basis.
What exactly is the order flow balance that I’m referring to for Uber Technologies stock? In the last 10 weeks, UBER managed to print only four up weeks, leading to an overall downward slope. When we filter historical trading data for this 4-6-D quantitative sequence, we notice an unusual characteristic in its forward 10-week behavior that we can potentially exploit.
If we were to assume a random walk for UBER stock over the next 10-week period, historical data suggests that the ticker’s median price could likely land between $69.50 and $72.50. At the week 10 endpoint, the most probabilistic price is between $71 and $72 — which isn’t much to brag about.
However, in the second week following the flashing of the 4-6-D signal, we tend to see a positive volatility cluster for Uber Technologies stock. Using an inductive approach, my guess is that there’s a solid chance that a similar scenario can repeat this time around.
Granted, we have to be careful here. Just because we witnessed a pattern in the past does not mean the trend is guaranteed to repeat in the future. Like all inductive models, the attempt to exploit order flow imbalances is prone to the black swan risk. It just takes one incident to go wrong for the model to look foolish.
Still, my main argument is that under certain conditions, a publicly traded security may undergo a nonrandom walk. And that’s the point here about UBER stock. Under 4-6-D conditions, there tends to be a nonrandom spike in week 2. I’m not guaranteeing that this volatility cluster will occur; rather, I’m just pointing to the history of such occurrences.
Plus, I’d like to point out that the concept of forecasting volatility clusters isn’t new. On July 29, I headlined an article on StockEarnings.com about a potential upsized move for Palantir Technologies (NASDAQ: PLTR). Now, I thought that PLTR stock was on pace to hit $127. It recently closed under $156. Nevertheless, the point still stands — a volatility cluster was signaled and a few days later it materialized.
Identifying a Tempting Idea
Having said all that, if the implications of the 4-6-D signal plays out as expected, the median endpoint price of UBER stock at week 2 is a little over $72. That means we may expect — assuming the implications of the model ring true — that half of outcomes may land above this point and half below. As such, the first instinct may be to consider a strategy involving $72 as an options-related target.
Still, arguably the most intriguing idea in the mix — which would be the 70/72 bull call spread expiring Aug. 21 — has a minor setback that might turn off some speculators. While the net debit is relatively cheap at $101 (meaning that this is the most that can be lost in the trade), the maximum profit should UBER stock rise through the $72 strike at expiration is $99.
If UBER’s odds of reaching $72 on Aug. 21 is indeed 50%, this would translate to an expected value of a loss of $1, stemming from this equation: (50% x $99) – (50% x $101) = EV. Obviously, the idea of suffering a negative EV isn’t exactly ideal. However, enhancing the reward potential only exacerbates the negative EV issue.
For example, you could push your luck with the Aug. 21 71/72.50 bull spread, which offers a max payout of over 111%. But because the probability of UBER stock reaching $72.50 at expiration (under my model) is only 43.4%, the reward isn’t enough to overcome the max profit/max loss split of $79/$71 into the positive side of the ledger.
To make a long story short, the return on risk for this trade would be about 19.57%, whereas the return on risk for the 70/72 bull spread would be less than 1%.
Yes, both options trading ideas lead to negative EV. However, if you are going to speculate, the 70/72 spread is more efficient against a risk-management framework.
A Final Note to Keep in Mind
I’m going to sound like a broken record but it must be stressed that prior patterns aren’t guaranteed to repeat. Nobody knows the future, especially when making a prediction in isolation. However, my belief is that certain market structures yield a tendency of nonrandom, asymmetric behaviors. If this behavior is divergent enough, we may be able to exploit it. That’s possibly the case with UBER stock.
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