SanDisk (SNDK) Plunges 13% as AI Sector Rotation Hammers Memory Stocks

Quick Summary

• SanDisk stock plummeted 13.37% Thursday amid rotation from AI hardware to software sectors
• The decline reflects momentum-driven profit-taking rather than fundamental company concerns
• BofA analyst upgraded price target from $2,100 to $2,500 while maintaining Buy recommendation
• Chinese manufacturer YMTC identified as primary structural threat to NAND market pricing
• Despite Thursday’s selloff, SNDK remains up more than 756% in 2024

SanDisk (SNDK) experienced a steep decline Thursday, shedding 13.37% as investors unwound holdings throughout the AI hardware and memory semiconductor sectors. During premarket activity, shares traded at $1,980.68, representing a 2.54% decline, before accelerating lower once regular trading commenced.

Sandisk Corporation, SNDK

The selloff stems from widespread sector rebalancing. Capital is flowing away from high-flying AI infrastructure names toward AI software companies, a shift that typically punishes stocks with the most substantial year-to-date appreciation.

No fresh company-specific negative developments triggered the downturn. This represents a classic momentum reversal.

SNDK began the trading week carrying gains of 756.10% year-to-date and an extraordinary 4,297.79% over the trailing twelve months. Following such explosive appreciation, sharp profit-taking episodes are common.

Despite the session’s volatility, analyst sentiment toward the stock remains unchanged. Bank of America’s Wamsi Mohan maintained his Buy recommendation Wednesday while lifting his price objective from $2,100 to $2,500.

Mohan projects $9.1 billion in June quarter revenue alongside earnings per share of $37.01. Both forecasts exceed consensus analyst estimates and surpass the company’s official guidance range of $7.75 billion to $8.25 billion in quarterly revenue.

Chinese Production Capacity Presents Headwind

A significant risk under trader scrutiny involves Chinese memory manufacturing capacity. Mohan highlighted Yangtze Memory Technologies Co. (YMTC) as a structural threat, cautioning that expanded production from the Chinese competitor could accelerate NAND price declines beyond current expectations.

His baseline scenario anticipates YMTC will concentrate on serving domestic Chinese customers instead of pursuing aggressive global market share. Should this assumption prove incorrect, the supply-demand equation could shift dramatically.

Industry observer Ming-Chi Kuo contributed additional perspective over the weekend, projecting the “memory supply-demand gap will keep widening through 2027.” Kuo further revealed that Apple is actively engaging the U.S. government regarding ChangXin Memory Technologies (CXMT) to establish additional DRAM sourcing alternatives.

Technical Chart Analysis

Even following Thursday’s retreat, the long-term trend architecture remains constructive. SNDK trades 1.9% above its 20-day simple moving average ($1,956), 25.1% beyond its 50-day SMA ($1,593), and 186.7% above its 200-day SMA ($695).

The moving average configuration — with the 20-day positioned above the 50-day, and the 50-day above the 200-day — preserves bullish technical structure.

The Relative Strength Index registers 54.24, having retreated from overbought conditions without entering oversold territory. This represents a moderated reading following the extended rally.

Critical resistance lies at $2,354.50, approaching the recent 52-week peak of $2,354.39. Primary support appears around $1,861, representing the nearest technical floor beneath current pricing.

SNDK commands a market capitalization of $301 billion. Average daily share volume totals 13.5 million.

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