If you've been watching the AI memory trade lately, you might feel like you're on a roller coaster that's only going down. Sandisk Corp. (SNDK) stock fell nearly 6% in Tuesday's premarket session after plunging 11.02% on Monday, as investors continued to unwind positions in artificial intelligence-linked memory stocks amid a broader risk-off move across the technology sector.

The weakness followed another sharp decline in SK hynix Inc. (SKHY), which dropped 7.47% on Monday, extending a sector-wide selloff that has swept through AI memory names. Micron Technology Inc. (MU) also fell more than 5% in Tuesday's premarket session. Nasdaq futures fell 0.81% before the opening bell, while S&P 500 futures slipped 0.08%, adding to pressure on high-growth semiconductor stocks.

AI Memory Trade Faces Pressure

The latest selloff reflects growing concerns that the AI memory rally may have become overcrowded after a prolonged run. SK hynix has now fallen nearly 47% from its June peak, wiping out hundreds of billions in market value and prompting investors to reassess valuations across the memory-chip industry. The weakness has spread beyond SK hynix, weighing on memory suppliers including Samsung Electronics Co. Ltd. (SSNLF), Kioxia, and China's ChangXin Memory Technologies (CXMT).

Investor sentiment also weakened after reports that China has made progress in developing deep ultraviolet (DUV) lithography machines, fueling concerns about future memory-chip supply growth and intensifying competitive pressure from Chinese manufacturers. Adding to the cautious mood, Deutsche Bank strategist Jim Reid told the Financial Times that renewed concerns over artificial intelligence infrastructure spending, combined with the prospect of lower-cost Chinese competition, sparked another round of selling across global semiconductor stocks.

Technical Picture Remains Mixed

Despite the recent selloff, Sandisk remains up more than 2,950% over the past 12 months, underscoring that the stock is still in a long-term uptrend despite weakening near-term momentum. The stock is trading 47.2% above its 200-day simple moving average (SMA) of $822.62. However, short-term momentum has weakened. Shares are trading 28.1% below the 20-day SMA of $1,684.11, 29.9% below the 50-day SMA of $1,727.21, and 7.5% below the 100-day SMA of $1,308.68.

The 20-day SMA has crossed below the 50-day SMA, a bearish signal that points to sustained near-term weakness. Still, the 50-day SMA remains above the 200-day SMA, indicating the longer-term trend remains intact. Momentum indicators also favor the bears. The moving average convergence divergence (MACD) indicator remains below its signal line, while the histogram is negative, suggesting buying momentum continues to fade. From a chart perspective, Sandisk reached both a swing high and a 52-week high in June before entering a corrective phase. Key technical levels include resistance near $1,308.68, around the 100-day SMA, and support near $998.65, close to the 200-day exponential moving average (EMA).

Earnings Due Next Week

Sandisk is scheduled to report quarterly results on August 5. Wall Street expects earnings of $33.38 per share, up sharply from 29 cents a year earlier, on revenue of $8.24 billion, compared with $1.90 billion in the prior-year period. The stock trades at about 43.7 times earnings, reflecting a premium valuation. Analysts maintain a Buy consensus rating with an average price forecast of $1,854.13.

Recent research actions include Susquehanna lowering its price forecast to $3,050 while maintaining a Positive rating on July 23, Wells Fargo raising its price forecast to $1,620 with an Equal Weight rating on July 22, and Bank of America raising its price forecast to $2,500 while reiterating its Buy rating on July 1.

Sandisk is a significant holding in several exchange-traded funds, including the Roundhill Memory ETF (DRAM), where it represents a 5.42% weighting, the Pacer US Large Cap Cash Cows Growth Leaders ETF (COWG) at 4.63%, and the Invesco S&P 500 Pure Growth ETF (RPG) at 7.29%. Because of those weightings, fund inflows and outflows can amplify buying or selling pressure in the stock.

SNDK Stock Price Activity: Sandisk shares were down 5.58% at $1,206.92 during premarket trading on Tuesday, according to market data.