Shares of SanDisk plunged 14% on Thursday, 6 August, falling to an intraday low of $1,163 apiece, after the company's revenue outlook disappointed Wall Street, overshadowing a stronger-than-expected performance in the fiscal fourth quarter.Investors appeared concerned about whether the memory-chip maker can sustain its exceptionally high profit margins after a sharp rally in the stock and a significant jump in AI-driven demand.For the fiscal fourth quarter, SanDisk reported revenue of $8.97 billion, nearly five times higher than the $1.9 billion reported in the corresponding period last year. The figure also exceeded Wall Street's estimate of $8.39 billion.The performance was largely driven by a surge in spending by cloud hyperscalers such as Meta, Amazon, Alphabet, and Microsoft, which continue to purchase large volumes of memory chips to power AI data centres, keeping demand well ahead of supply.Adjusted earnings came in at $39.25 per share, comfortably beating Wall Street's estimate of $34.96 per share. A year ago, the company had reported adjusted earnings of $0.29 per share on revenue of $1.9 billion, translating into a roughly 13,500% jump in adjusted earnings and a 372% increase in revenue.Net income stood at $6.9 billion, or $43.97 per share, compared with a net loss of $23 million, or 16 cents per share, in the year-ago quarter.The sharp turnaround underscores how enterprise storage has evolved from a commoditised hardware business into a critical component of AI infrastructure, driven by rising demand for training and deploying large language models and generative AI applications.Looking ahead, SanDisk expects first-quarter fiscal 2027 revenue in the range of $10.3 billion to $10.8 billion, a forecast that fell short of investors.The company expects adjusted earnings per share of $44.00-$46.00, broadly in line with analysts' estimate of $44.20 per share.SanDisk also said it has eight long-term agreements with six customers worth at least $93.9 billion, with a median contract duration of four years. The company added that it has signed five additional agreements since April, reflecting continued demand for its AI-related storage products.AI-driven rally powers multibagger gainsThe stock has delivered exceptional gains over the past year as technology giants and cloud providers ramped up investments in large-scale AI data centres, driving demand for enterprise solid-state drives (eSSDs) far beyond global supply.During this period, the stock has surged from $47 to Wednesday's closing price of $1,350, translating into a remarkable 2,772% gain. Although the stock corrected 46% in June, its longer-term returns remain impressive.So far in 2026, the stock has rallied 443%. During the year, it also crossed the $2,300 mark to hit a record high of $2,354 before witnessing a pullback.(With inputs from agencies)Disclaimer: We advise investors to check with certified experts before making any investment decisions.