TLDR
- SNDK reached a 52-week peak of $1,600 on May 11, finishing at $1,547.56, representing a 552% gain year to date
- Q3 fiscal 2026 datacenter revenue skyrocketed 233% quarter-over-quarter, fueled by AI-driven SSD adoption
- Shares fell approximately 8% on May 12, touching $1,402.27, pressured by South Korean AI taxation discussions
- An insider disposed of $870,300 in shares, while short positions have expanded during the stock’s ascent
- The company approved a $6 billion share repurchase program and reported $3.74 billion cash with no outstanding debt
SanDisk (SNDK) Stock Climbs to $1,600 Before Retreating 8% on Tax Policy Speculation
SanDisk reached a fresh 52-week peak of $1,600 on May 11, ultimately settling at $1,547.56. Entering Monday’s trading session, the shares had skyrocketed 552% year to date — delivering the strongest returns among all S&P 500 constituents.
Tuesday brought a different narrative.
SNDK shares plummeted approximately 8% during early May 12 trading, bottoming at a session low of $1,402.27. The catalyst emerged from South Korea’s presidential chief of staff, Kim Yong-beom, who suggested via Facebook that the country should impose a specialized tax on AI companies to support a “national dividend” program.
This suggestion represents mere speculation rather than formal legislation. It has already encountered significant domestic opposition, with critics labeling the concept “dangerous and irresponsible.” However, in a market where SNDK commands elevated valuations following a 552% surge, even unconfirmed policy discussions proved sufficient to trigger widespread profit-taking.
The broader storage industry experienced similar downward pressure. Micron and Western Digital both declined over 3%, while Seagate retreated more than 1%. Major indices also suffered, with the S&P 500 declining 0.87%, the Dow falling 0.56%, and the Nasdaq dropping 1.51%.
What’s Driving the Business
The pullback hasn’t altered the fundamental narrative. SanDisk’s datacenter revenue exploded 233% sequentially during Q3 fiscal 2026 as cloud hyperscalers and enterprise customers accelerated AI infrastructure buildouts utilizing high-performance enterprise solid-state drives.
Executives have positioned NAND flash technology as an essential component of AI architecture. Expanding AI models, key-value cache demands, and retrieval-augmented generation applications all require substantial, high-speed storage capabilities.
SanDisk secured an extension of its joint venture partnership with Kioxia through December 2034 and allocated approximately $1 billion toward Nanya to guarantee long-term DRAM availability. The organization has executed five multi-year New Business Model contracts supported by financial commitments exceeding $11 billion, with over one-third of fiscal 2027 production already locked into long-term agreements.
For Q4 fiscal 2026, executives projected non-GAAP revenue between $7.75 billion and $8.25 billion, with gross margins spanning 79% to 81% and earnings ranging from $30.00 to $33.00 per share. The Zacks consensus estimate stands at $32.40 per share, reflecting a 76% increase over the previous 30 days. This contrasts sharply with earnings of 29 cents per share during the comparable quarter last year.
Reasons for Caution
Not all indicators suggest continued upward momentum. On May 12, a company director liquidated 579 SNDK shares worth $870,300, averaging $1,503.11 per share. Short interest has consistently expanded as the stock has climbed throughout 2026.
Several prominent Wall Street institutions — including RBC, Barclays, and Wells Fargo — have refrained from issuing buy recommendations despite the stock’s remarkable performance.
SNDK currently commands a forward price-to-sales ratio of 5.97x, exceeding the industry median of 3.96x and surpassing Micron’s 5.73x. Western Digital trades at 10.63x and Seagate at 12.37x.
The company concluded Q3 holding $3.74 billion in cash reserves, zero remaining debt obligations, and $3.04 billion in operational cash flow. Capital expenditures totaled merely $240 million, representing 4% of revenues for the quarter. The $6 billion buyback authorization remains active.
Despite Tuesday’s decline, SNDK continued outperforming the S&P 500 by 3.45% during the trading session.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
