Key Takeaways
- Thursday saw SNDK shares decline 13.37% as market participants shifted capital from AI hardware to software stocks
- No negative company developments triggered the selloff—pure profit-taking dynamics at work
- BofA analyst upgraded price target from $2,100 to $2,500 while maintaining Buy recommendation
- Chinese manufacturer YMTC represents significant structural threat to NAND market pricing power
- Year-to-date gains remain impressive at 756%+ despite Thursday’s decline
Shares of SanDisk (SNDK) experienced significant downward pressure Thursday, shedding 13.37% as market participants liquidated positions throughout the AI hardware and memory semiconductor sectors. Premarket trading showed the stock at $1,980.68, declining 2.54%, before accelerating losses once regular trading commenced.
The decline stems from widespread sector realignment. Capital flows are redirecting away from high-flying AI hardware positions toward AI software companies, a rotation pattern that disproportionately impacts stocks with the strongest year-to-date performance.
No adverse company-specific developments are responsible for the selloff. This represents pure momentum reversal dynamics.
SNDK began the week with spectacular year-to-date returns of 756.10% and trailing twelve-month gains of 4,297.79%. Following such extraordinary appreciation, aggressive profit-taking becomes inevitable and can materialize rapidly.
Despite Thursday’s volatility, analyst sentiment remains firmly positive. Bank of America’s Wamsi Mohan reaffirmed his Buy rating Wednesday while elevating his price objective from $2,100 to $2,500.
Mohan’s financial projections anticipate $9.1 billion in June quarter revenue alongside earnings per share of $37.01. These estimates surpass both consensus forecasts and management’s official guidance range of $7.75 billion to $8.25 billion for quarterly revenue.
“We expect supply/demand imbalance in the NAND market to remain through 2027,” Mohan wrote, adding that pricing should hold through mid-2027. Bernstein also raised its price target on the stock recently.
Chinese Manufacturing Capacity Raises Concerns
Market participants are monitoring Chinese memory production capabilities closely. Mohan identified Yangtze Memory Technologies Co. (YMTC) as a substantial structural risk, cautioning that increased output from this Chinese competitor could accelerate NAND price deterioration beyond current expectations.
His baseline scenario presumes YMTC will concentrate on serving domestic Chinese customers rather than pursuing aggressive global market penetration. Should this assumption prove incorrect, the competitive landscape would shift dramatically.
Industry expert Ming-Chi Kuo contributed additional perspective this past weekend, stating the “memory supply-demand gap will keep widening through 2027.” Kuo further revealed that Apple is engaging in active discussions with U.S. officials regarding ChangXin Memory Technologies (CXMT) to expand DRAM sourcing alternatives.
Technical Picture Remains Constructive
Even following Thursday’s correction, the intermediate and long-term technical framework remains healthy. SNDK is positioned 1.9% above its 20-day simple moving average ($1,956), 25.1% above its 50-day SMA ($1,593), and 186.7% above its 200-day SMA ($695).
The moving average configuration—with the 20-day exceeding the 50-day, and the 50-day exceeding the 200-day—preserves bullish technical alignment.
The Relative Strength Index registers 54.24, having retreated from overbought conditions without entering oversold territory. This represents healthier momentum readings following an extended upward move.
Immediate resistance emerges at $2,354.50, proximate to the recent 52-week peak of $2,354.39. Primary support develops around $1,861, representing the nearest significant level beneath current valuation.
SNDK commands a market capitalization of $301 billion. Typical daily trading volume averages 13.5 million shares.
