sandiskThe company’s stock soared 14% after the company missed Wall Street’s second-quarter earnings estimates as the artificial intelligence boom soared demand for its chips.
The flash storage memory company reported earnings per share of $6.20 excluding items, beating the $3.62 per share expected by analysts surveyed by FactSet. Revenue was $3.03 billion, exceeding expectations of $2.69 billion.
The stock had soared more than 20% premarket.
SanDisk’s third-quarter outlook also exceeded analysts’ expectations.
SanDisk had expected sales of $4.4 billion to $4.8 billion for the quarter. That blew out the $2.93 billion that FactSet had expected. The company expects third-quarter adjusted earnings of $12 to $14 per share, more than double the $5.11 per share expected by analysts.
Memory companies such as SanDisk are feeling a tailwind from a surge in memory demand as companies race to focus more storage supply on building the power-hungry data centers that power the AI revolution.
The company’s data center business grew 64% sequentially.
This background also created an imbalance between supply and demand, allowing memory companies to raise prices and maintain high profit margins.
SanDisk said it expects third-quarter gross margins to be in the range of 65% to 67%, well above the 49.3% expected by analysts surveyed by StreetAccount.
Memory shortages are hitting multiple areas of the technology sector. apple The company reported its own supply issues when it announced its first-quarter results on Thursday.
Chief Executive Officer Tim Cook said advances in node manufacturing are preventing increased production of iPhones, but the company will be hurt by rising memory prices.
Cook said Apple is considering “a range of options to address that.”
