SanDisk's 29% Plunge and 4% Snapback: Chip Rout Meets a $42 Billion Backbone
Published on 07/18/2026 at 06:13 | Redaktion boerse-global.de
The chipmaker SanDisk delivered a split-screen performance across two Fridays that encapsulates the whiplash gripping the semiconductor sector. After plummeting 29.17% in the week ended July 26 to close at €1,190, the stock reversed course the following Friday, jumping 4.03% to €1,290. That partial recovery still leaves the shares 37.38% below the 52-week high of €2,060 reached on June 22 — and barely 5.31% above the mid-July low of €1,130.
The initial selloff was no isolated affair. The Philadelphia Semiconductor Index collapsed roughly 10 to 11 percent over the same week, entering bear-market territory at 20% below its June 22 record. Triggers were legion: Chinese AI upstart Moonshot unveiled Kimi K3, touted as the world's largest open-source model with 2.8 trillion parameters, stoking competitive anxiety. Alphabet was rumored to be falling behind on its Gemini 3.5 Pro timeline. Heightening the pressure, SK Hynix's Nasdaq-listed shares dropped 9% on their trading debut, and the stock later slid as much as 13.69% in a single session. Over at Micron, single-day losses hit 6%. Secondary catalysts included TSMC's rising capital expenditure weighing on industry margins and heightened geopolitical tensions between the US and Iran, which lifted oil prices and dulled risk appetite.
Amid the carnage, SanDisk's underlying business offers a starkly different picture. Third-quarter revenue surged 97% sequentially to $5.95 billion, with earnings per share of $23.41 handily beating the $14.17 consensus. The data center segment was the engine, generating roughly $1.4 billion in sales — a 645% leap — on gross margins near 56%. That growth has been locked in by five multiyear supply agreements with a combined minimum value of $42 billion, including a long-term NAND flash contract with Meta Platforms. SanDisk also extended its joint venture with Kioxia through 2034, committing $1.165 billion for manufacturing services. For the current quarter, management guided revenue of $7.75–8.25 billion and adjusted EPS of $30–33.
Should investors sell immediately? Or is it worth buying SANDISK?
The analyst community remains deeply split. Erste Group downgraded the stock to Hold shortly before the results, while Bank of America, Citigroup and Bernstein set targets at $2,500 to $3,000. Argus maintains a short-term Hold but a long-term positive view. The consensus target stands at $1,803.29, though a compilation of roughly 20 analyst opinions — and a worst-case scenario of $1,000 — underscores the uncertainty. JPMorgan strategist Hugh Gimber described chip industry earnings as "absolutely solid" but cautioned that further gains depend on big cloud providers reaffirming AI investment in upcoming reports.
The valuation gap tells part of the story. Based on 2027 earnings estimates, SanDisk trades at a price-to-earnings ratio of roughly 7.6 — a multiple that Morningstar noted had compressed along with the stock, pushing the forward P/E to 6.3 after the rout. The RSI indicator sits at 41.7, neither overbought nor oversold, but the annualized 30-day volatility of 143.16% underscores jittery hands. The Parnassus Growth Equity Fund nevertheless added SanDisk to its portfolio during the second quarter, a period when the fund returned 17.49% and beat the Russell 1000 Growth Index.
Near-term headwinds are not scarce. Insider sales totaled approximately $10.2 million recently, with a director and a vice president unloading shares at prices between $1,503 and $1,756. Weakening NAND prices, rising supply, and the prospective IPO of Chinese memory maker CXMT add further pressure. The next waypoint is August 5, when SanDisk reports quarterly results. Investors will scrutinize NAND pricing trends, the progress of those $42 billion in contractual commitments, and any clues ahead of a potential investor day. For a stock that has swung from a six-fold annual gain to a two-week 29% rout and a 4% snapback, the only certainty is the calendar.
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SANDISK Stock: New Analysis - 18 July
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