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Sandisk Corporation (Sandisk (SNDK)) shares were on a rollercoaster in Wednesday's premarket session as investors positioned themselves ahead of next week's earnings report. The stock was up 0.85% at $1,105.39, but the movement was anything but calm.
Nasdaq futures edged up less than 0.5%, while S&P 500 futures gained 0.19%. The memory sector remained in focus after rival SK hynix (SK hynix (SKHY)) posted a quarterly profit miss, sending ripples through the industry.
SK hynix, a key competitor and co-developer with Sandisk of High Bandwidth Flash (HBF) memory technology for AI workloads, reported earnings below expectations. But here's the thing: the company didn't blink on its AI spending plans. It said it plans to increase 2026 capital spending by about 50% to the high-40 trillion won range, or at least $31 billion, after quarterly operating profit surged more than sixfold. Management noted that long-term supply agreements with major customers continue to support those investment plans.
Executives also dismissed oversupply concerns during the earnings call, saying they would adjust investments based on demand. They expect cloud service providers to keep increasing AI spending beyond 2027 and believe memory supply will remain tight for the foreseeable future. So, the AI memory narrative is still very much alive.
Sandisk is scheduled to report second-quarter results on Aug. 5, and investors are watching closely to see if the stock can stabilize after its sharp retreat from June highs. Analysts expect earnings of $33.38 per share, compared with 29 cents a year earlier. Revenue is projected to rise to $8.24 billion from $1.90 billion. Those are some eye-popping numbers, but they also set a high bar.
The stock trades at about 37.5 times earnings, reflecting a premium valuation that leaves little room for disappointment if results or guidance fall short. Wall Street maintains a consensus Buy rating with an average price forecast of $1,854.13. Recent analyst actions include:
That's a wide range of targets, from $1,620 to $3,050, showing just how much uncertainty surrounds the stock right now.
Sandisk remains above its long-term trend indicators, with the stock trading above its 200-day simple moving average of $827.44 and 200-day exponential moving average of $999.62. That suggests the broader uptrend is still intact. But the shorter-term picture has weakened considerably.
The stock trades 32.2% below its 20-day simple moving average and 35.5% below its 50-day simple moving average, reflecting a sharp pullback in recent weeks. The 20-day moving average has also fallen below the 50-day moving average, a bearish crossover that often signals continued near-term selling pressure. Even so, the 50-day moving average remains above the 200-day moving average, indicating the longer-term trend has not yet reversed.
Momentum indicators also point to softer buying interest. The moving average convergence divergence (MACD) remains below its signal line, while the histogram is negative, suggesting bullish momentum continues to fade.
Key resistance sits near $1,313.65, around the 100-day simple moving average. Key support is near $999.62, which aligns with the 200-day exponential moving average and the psychologically important $1,000 level. If the stock breaks below that, things could get interesting.
Sandisk carries a Momentum score of 99.88, indicating strong long-term price performance despite the recent pullback. Its Value score of 12.59 suggests the shares remain richly valued, leaving less room for disappointment if earnings or guidance fall short of expectations. So, it's a high-momentum, high-valuation play.
Sandisk is a significant holding in several exchange-traded funds, including:
Large inflows or outflows in these funds can influence trading activity in Sandisk shares, so keep an eye on them.
Sandisk shares were up 0.85% at $1,105.39 during premarket trading on Wednesday, according to market data. The stock has been volatile, and with earnings just around the corner, that volatility is likely to continue.
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