SanDisk Stock Takes a Breather After Thursday's AI Rally

MarketDash

Jun 26, 12:24 PM • 2 hours ago

SanDisk shares dip 5% premarket as traders cash in on recent gains, but the longer-term uptrend remains intact.

Key Points

SanDisk stock fell nearly 5% in premarket trading Friday as investors locked in profits following a 22% surge on Thursday, driven by AI memory chip optimism from Micron's earnings.
The pullback is technical, not fundamental: the stock remains above key moving averages, and the MACD indicator still shows bullish momentum, though the RSI had entered overbought territory.
Wall Street expects SanDisk to report Q2 earnings on Aug. 13, with analysts projecting a massive jump in earnings per share from $0.29 to $33.34 year-over-year, and revenue rising from $1.90 billion to $8.24 billion.
Analyst sentiment remains bullish, with Citigroup, Mizuho, and Bank of America all raising price targets in June, while the stock's high Momentum score (99.95) and low Value score (4.28) highlight its growth-at-a-premium profile.

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SanDisk Corporation (SNDK) shares slipped nearly 5% in Friday's premarket session, a classic case of "buy the rumor, sell the news" — or in this case, "buy the rally, take some profits." The stock had surged 21.97% on Thursday after Micron Technology Inc. (MU) delivered upbeat earnings and guidance that reinforced the AI-driven memory chip boom. But with no fresh company-specific news on Friday, traders decided to cash in some chips.

The broader market didn't help either. Nasdaq futures were down 1.04% and S&P 500 futures off 0.44%, giving risk-averse investors another reason to trim positions in high-beta tech names like SanDisk.

Still, this looks more like a pause than a reversal. Let's dig into the numbers.

Technical Analysis: Still Bullish, But Stretched

Friday's dip hasn't dented SanDisk's longer-term uptrend. The stock continues to trade above its 20-day, 50-day, and 200-day simple moving averages — a bullish alignment that suggests buyers are still in control. The MACD indicator remains above its signal line with a positive histogram, indicating that bullish momentum is intact.

But here's the catch: the Relative Strength Index (RSI) entered overbought territory earlier this month. When a stock is that stretched, any whiff of market weakness can trigger profit-taking. The 20-day moving average near $1,874 is the first key support level to watch, while resistance sits near the 52-week high of about $2,354.

Earnings and Analyst Outlook: Big Expectations

Wall Street is looking ahead to SanDisk's second-quarter results, expected on August 13. The numbers are eye-popping: analysts project earnings of $33.34 per share on revenue of $8.24 billion. Compare that to the year-ago quarter, when the company earned just $0.29 per share on $1.90 billion in revenue. That's a massive leap, driven by AI memory demand.

Analysts are overwhelmingly bullish. Recent actions include:

Citigroup reiterated Buy and raised its price target to $2,500 on June 25.
Mizuho maintained Outperform and lifted its target to $2,200 on June 8.
Bank of America Securities reiterated Buy and increased its target to $2,100 on June 8.

The stock carries a consensus Buy rating, reflecting confidence in the AI memory narrative.

Momentum vs. Value: A Growth Story

SanDisk's market data paints a clear picture: this is a momentum stock. It has a Momentum score of 99.95, meaning it has outperformed nearly every other stock over the past year. Its Value score, however, is just 4.28 — indicating shares trade at a premium. That combination means investors are betting on future growth rather than current valuation, which makes the stock sensitive to shifts in sentiment. Pullbacks like Friday's are a natural part of that dynamic.

ETF Exposure: Ripple Effects

SanDisk is a meaningful holding in several exchange-traded funds, which can amplify price moves when money flows in or out. Key ETFs include:

Roundhill Memory ETF (DRAM): 5.42% weighting.
Invesco S&P 500 Pure Growth ETF (RPG): 7.29% weighting.
First Trust US Equity Opportunities ETF (FPX): 7.74% weighting.

Large inflows or outflows in these funds can create additional buying or selling pressure for the stock.

Price Action

As of Friday's premarket, SanDisk shares were down 4.71% at $2,225.00, according to market data. The stock's 52-week high of $2,354 remains within striking distance, but the near-term path may depend on whether broader market jitters persist or fade.