Key Takeaways
- Shares of SNDK declined 13.37% Thursday amid broader rotation from AI hardware to software sectors
- Decline attributed to profit-taking rather than fundamental deterioration
- Bank of America upgraded price target to $2,500 from $2,100 while maintaining Buy recommendation
- Chinese competitor YMTC identified as potential structural headwind for NAND market pricing
- Despite Thursday’s selloff, SNDK maintains impressive 756% gain year-to-date
Shares of SanDisk (SNDK) experienced a significant downturn Thursday, declining 13.37% as investors executed a broad rotation away from AI hardware and memory semiconductor stocks. Premarket trading showed the stock at $1,980.68, down 2.54%, with selling pressure intensifying throughout the regular session.
The selloff reflects a wider sector reallocation strategy. Capital is flowing from high-momentum AI infrastructure names toward AI application and software companies, a dynamic that typically impacts the year’s strongest performers most severely.
No negative company-specific developments triggered Thursday’s decline. The movement represents a momentum-driven correction.
SNDK began the week carrying a remarkable 756.10% year-to-date gain and an extraordinary 4,297.79% advance over the trailing twelve months. Following such explosive appreciation, rapid profit-taking episodes are common.
Thursday’s price action hasn’t altered the fundamental outlook from major Wall Street institutions. Bank of America’s Wamsi Mohan maintained his Buy recommendation Wednesday while elevating his price objective from $2,100 to $2,500.
Mohan’s financial projections include $9.1 billion in June quarter revenue alongside $37.01 in earnings per share. These estimates exceed both consensus forecasts and management’s guidance band of $7.75 billion to $8.25 billion in quarterly revenue.
“We expect supply/demand imbalance in the NAND market to remain through 2027,” Mohan stated, projecting stable pricing conditions extending into mid-2027. Bernstein recently implemented a similar price target increase.
Chinese Manufacturing Capacity Represents Key Variable
A primary concern among market participants involves Chinese memory chip production capabilities. Mohan specifically highlighted Yangtze Memory Technologies Co. (YMTC) as a structural challenge, cautioning that expanded output from the Chinese manufacturer could accelerate NAND pricing pressure beyond current expectations.
His baseline scenario anticipates YMTC maintaining focus on China’s domestic market rather than pursuing aggressive global expansion. Any deviation from this trajectory would materially alter supply dynamics.
Industry specialist Ming-Chi Kuo contributed additional perspective over the weekend, projecting that the “memory supply-demand gap will keep widening through 2027.” Kuo further revealed that Apple is engaging the U.S. government regarding ChangXin Memory Technologies (CXMT) to expand DRAM sourcing alternatives.
Technical Position Remains Constructive
Despite Thursday’s correction, the underlying trend structure maintains bullish characteristics. SNDK continues trading 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 positioned above the 50-day, and the 50-day above the 200-day — preserves positive alignment.
The Relative Strength Index registers 54.24, retreating from overbought levels without approaching oversold conditions. This represents a healthier reading following an extended upward move.
Critical resistance emerges at $2,354.50, adjacent to the current 52-week peak of $2,354.39. Primary support appears around $1,861, representing the nearest significant level beneath present prices.
SNDK commands a market capitalization of $301 billion. The stock averages 13.5 million shares in daily trading volume.
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