July 2, 2026, SanDisk (SNDK.O) closed at $1,745.00, plunging $287.22 in a single day—a 14.13% drop. Trading volume reached 17.34 million shares, with a turnover rate of 11.7%. The intraday low touched $1,693, with a volatility of 17.69%. After hours, the stock rebounded slightly to $1,762.07.
This wasn’t an isolated event. On the previous trading day, SanDisk had already fallen 10.6%. Over two days, the cumulative decline reached 23.25%, officially entering a technical bear market. During the same period, Micron Technology dropped 15.48%, Seagate Technology fell 15.01%, and Western Digital lost 15.61%. Across these four major memory chip leaders, roughly $340 billion in market value evaporated in just two trading days.
SanDisk Plunges 14% in One Day—What Triggered the Selloff?
The immediate catalyst for the collective selloff in the memory chip sector came from Meta. On July 1, Bloomberg reported that Meta is forming a business unit to generate revenue by selling excess computing power to external clients. Following the news, Meta’s stock surged nearly 10%, but chip stocks collapsed across the board.
The market’s logic was straightforward: If Meta has surplus computing power to rent out, it suggests that tech giants’ AI capital expenditures may have overshot actual demand—compute resources are no longer "absolutely scarce." Rich Privorotsky, head of Goldman Sachs Delta One, summarized it succinctly: "The core market premise is the scarcity of compute resources. If scarcity persists, prices should remain firm, supporting ongoing capital spending. If supply increases and rental prices keep dropping, that directly challenges the narrative of compute resource shortages."
Shortly after, news broke that Anthropic is in talks with Samsung Electronics to jointly develop proprietary AI chips. The combination of these two stories hit the most sensitive nerve in the AI supply chain: Is the rapid, two-year expansion of AI capital expenditure shifting from a race for scale to a focus on efficiency?
AI Capital Expenditure Logic Faces Rethink—Why Are Memory Chips Hit First?
Over the past two years, the main narrative driving the AI hardware sector was clear: The bigger the models, the more inference, the greater the shortage of compute, the more tech giants ramp up capital spending. The entire AI hardware chain—from GPUs to memory, from foundries to equipment—was embedded in this single storyline.
But with the Meta and Anthropic news, the narrative shifted. Meta aims to monetize underutilized AI compute, focusing on boosting returns from tens of billions invested in AI infrastructure. Anthropic is pushing for custom ASIC development, aiming to reduce long-term costs. Different paths, same goal: making AI investment more sustainable.
Memory chips are particularly vulnerable because they’re highly sensitive to capital expenditure cycles. The demand for AI servers and enterprise SSDs depends on tech giants’ continued data center expansion. Once the market starts doubting whether capital spending can keep accelerating, the valuation premium for memory chips faces immediate pressure. The Philadelphia Semiconductor Index dropped over 11% in two trading days, while memory ETFs plunged more than 10%.
Did SanDisk’s Massive Year-to-Date Rally Set Up the Selloff?
Beyond the news-driven shock, a simpler reason is that SanDisk "ran up too much." In the first half of 2026, SanDisk’s peak year-to-date gain approached 900%, far outpacing most semiconductor stocks. Micron was up over 300% for the same period. When any asset rallies to such extremes, even minor negative news can trigger a rush to lock in profits.
Industry research firm Intellectia noted that parabolic price moves inevitably make stocks vulnerable to shifts in market sentiment. When share prices reflect years of optimistic growth expectations, even a slight crack in bullish sentiment can lead to sharp corrections.
From a trading perspective, heavy profit-taking combined with leveraged positions can create a stampede on the way down. Before the plunge, SanDisk’s price-to-earnings ratio was as high as 77x. Such lofty valuations amplify the impact of any negative news.
Has SanDisk’s Fundamental Outlook Actually Deteriorated?
Based on disclosed financials, SanDisk’s fundamentals haven’t shown significant deterioration. In Q3 fiscal 2026, revenue reached $5.95 billion, up 97% quarter-over-quarter and 251% year-over-year. GAAP net income was $3.615 billion. Crucially, data center revenue hit $1.467 billion, up 233% quarter-over-quarter and 645% year-over-year, indicating that demand for AI servers and enterprise SSDs is rapidly reshaping SanDisk’s revenue mix. The company’s Q4 guidance is also strong, projecting revenue between $7.75 billion and $8.25 billion.
Western Digital (SanDisk’s parent company prior to the spin-off) reported Q3 revenue of $3.34 billion, up 45% year-over-year, with non-GAAP gross margin breaking 50% for the first time.
However, markets trade not just on current data, but on future expectations. SanDisk is locking in prices and customer prepayments through new long-term supply agreements, aiming to make profits less dependent on traditional memory cycles. Yet the market didn’t seem convinced amid the selloff—even as Kioxia and SanDisk announced the start of production for their tenth-generation 3D NAND products, the stock still tanked.
Wide Institutional Divergence—What Is the Market Pricing In?
Institutional price targets for SanDisk are highly polarized. Bernstein raised its target from $1,700 to $3,000. Jefferies also set a $3,000 target. Susquehanna went even higher, at $3,250—one of the most bullish forecasts. Bank of America raised its target from $2,100 to $2,500, believing NAND supply shortages could last until mid-2027.
In contrast, Morgan Stanley’s cautious target is just $1,750, nearly matching the latest share price. Among 22 analysts, price targets range from $1,000 to $3,250, with an average of $1,864—only about 6.8% above the latest closing price.
Such wide divergence signals that the market’s valuation of SanDisk has moved beyond simple extrapolation of fundamentals, entering a multi-faceted game involving AI capital expenditure cycles, memory supply-demand dynamics, and industry competition.
How Can Gate Users Participate in Memory Chip Market Moves?
For investors tracking the memory chip sector, Gate now offers live US stock trading services, supporting over 10,000 US-listed stocks. Users can trade directly using USDT liquidity in their Gate accounts—no currency conversion, no cross-border remittance, no need to open a separate brokerage account. One-click trading is available for real US stocks listed on the NYSE, NASDAQ, and other major US exchanges.
Core memory chip stocks like SanDisk (SNDK), Western Digital (WDC), and Micron Technology (MU) are all available through Gate’s live US stock trading products. Users can participate directly in the price action of the memory chip sector on the platform.
Summary
Last Friday, SanDisk plunged 14.13% in a single day to $1,743. Over two days, the stock dropped more than 23%, entering a technical bear market—a result of multiple factors converging: Meta’s compute rental plans sparked a rethink of AI capital expenditure logic, Anthropic’s custom chip news accelerated the narrative shift, a nearly 900% year-to-date rally triggered heavy profit-taking, and high valuations amplified the impact of negative news.
Fundamentally, SanDisk’s revenue, profits, and guidance remain robust, and the NAND supply-demand landscape hasn’t fundamentally reversed. The wide divergence in institutional price targets shows the market is undergoing a dramatic valuation reset. While a short-term rebound has begun, confirmation of a new trend will require more signals.
The future direction of the memory chip sector hinges on one key question: Is AI capital expenditure shifting from "expansion" to "efficiency optimization," or is it merely a temporary adjustment in pace? The answer will determine whether SanDisk has fallen into a golden buying opportunity, or is entering a prolonged period of value reassessment.
FAQ
Q1: What’s the main reason for SanDisk’s recent plunge?
The immediate trigger was news that Meta plans to rent out surplus AI compute, prompting the market to question the "absolute scarcity" logic for compute resources. Combined with rumors about Anthropic developing custom chips, heavy profit-taking after massive year-to-date gains, and fragile sentiment amid high valuations, multiple factors converged to drive SanDisk’s 14% single-day drop.
Q2: Has SanDisk’s fundamental outlook deteriorated?
Based on disclosed financials, SanDisk’s fundamentals haven’t worsened. Q3 fiscal 2026 revenue was $5.95 billion, up 251% year-over-year, with data center revenue up 645%. The company’s Q4 guidance is also strong. The recent plunge is more about valuation and sentiment adjustments, not fundamental deterioration.
Q3: What’s the outlook for the memory chip sector?
The outlook depends on whether the logic of AI capital expenditure undergoes a fundamental change. If tech giants are only temporarily adjusting the pace of spending, the underlying demand for memory chips remains solid. If "compute surplus" becomes industry consensus, memory chip valuations will face a longer period of reset. On July 6, the sector saw an oversold rebound, but confirmation of a new trend still requires observation.
Q4: Can I trade SanDisk stock on Gate?
Yes. Gate now offers live US stock trading services, supporting over 10,000 US-listed stocks, including core memory chip stocks like SanDisk (SNDK), Western Digital (WDC), and Micron Technology (MU). Users can trade directly using USDT on the platform.
