$SNDK
Can SanDisk bottom-fish?
First, the conclusion: Fundamentally, things haven’t broken down for now. But at this moment, it’s more suitable to wait for confirmation rather than treat a single sharp selloff as “a bargain.”
SanDisk has recently plunged nearly 10% in a single day. The most direct reason isn’t that the company suddenly lost orders, but that the entire storage sector has been re-rated: the market worries that tech giants will cut back AI-related capital expenditure, and also that the storage stocks that had surged by several multiples earlier have become too crowded in terms of trading.
The case for bottom-fishing is quite clear:
TrendForce expects NAND contract prices to keep rising quarter over quarter by 10%—15% in the third quarter, and that in 2026 the overall market will still be in a supply-demand imbalance of shortage. Demand for enterprise SSDs from AI servers hasn’t disappeared either. In other words, the price drop is happening while the industry is still raising prices.
However, the risks are just as evident:
NAND price growth is already narrowing, and consumer electronics are starting to feel the pressure of high pricing. TrendForce expects that as new supply is released, the NAND supply growth rate in 2027 could exceed demand. SanDisk had risen by several multiples earlier this year; the market was previously pricing in “long-term scarcity.” As soon as that expectation loosens, valuation could be compressed further.
Also note that CXMT mainly produces DRAM, so it’s not SanDisk’s direct competitor. What SanDisk truly needs to watch is NAND capacity from Samsung, SK hynix, Kioxia, and Yangtze Memory, as well as AI capital expenditure from companies such as Microsoft, Meta, and Amazon.
So whether SanDisk can bottom-fish shouldn’t be judged only by how much it has fallen. Instead, look at three data points:
Whether NAND contract prices continue to rise;
Whether enterprise SSD orders and gross margins remain stable;
Whether cloud providers continue to increase AI capital expenditure.
If these three indicators don’t all weaken at the same time, the selloff is more like a valuation and position liquidation. Only when prices, orders, and capital expenditure all turn downward together could it become a true turning point in the cycle.
What you can buy now is “still-tight fundamentals,” but you have to absorb “valuation mean reversion after a several-multiple rally.” This isn’t without opportunity, but it’s more suitable to observe in batches rather than bet all your judgment on a single day’s drop in the stock price.
Can SanDisk bottom-fish?
First, the conclusion: Fundamentally, things haven’t broken down for now. But at this moment, it’s more suitable to wait for confirmation rather than treat a single sharp selloff as “a bargain.”
SanDisk has recently plunged nearly 10% in a single day. The most direct reason isn’t that the company suddenly lost orders, but that the entire storage sector has been re-rated: the market worries that tech giants will cut back AI-related capital expenditure, and also that the storage stocks that had surged by several multiples earlier have become too crowded in terms of trading.
The case for bottom-fishing is quite clear:
TrendForce expects NAND contract prices to keep rising quarter over quarter by 10%—15% in the third quarter, and that in 2026 the overall market will still be in a supply-demand imbalance of shortage. Demand for enterprise SSDs from AI servers hasn’t disappeared either. In other words, the price drop is happening while the industry is still raising prices.
However, the risks are just as evident:
NAND price growth is already narrowing, and consumer electronics are starting to feel the pressure of high pricing. TrendForce expects that as new supply is released, the NAND supply growth rate in 2027 could exceed demand. SanDisk had risen by several multiples earlier this year; the market was previously pricing in “long-term scarcity.” As soon as that expectation loosens, valuation could be compressed further.
Also note that CXMT mainly produces DRAM, so it’s not SanDisk’s direct competitor. What SanDisk truly needs to watch is NAND capacity from Samsung, SK hynix, Kioxia, and Yangtze Memory, as well as AI capital expenditure from companies such as Microsoft, Meta, and Amazon.
So whether SanDisk can bottom-fish shouldn’t be judged only by how much it has fallen. Instead, look at three data points:
Whether NAND contract prices continue to rise;
Whether enterprise SSD orders and gross margins remain stable;
Whether cloud providers continue to increase AI capital expenditure.
If these three indicators don’t all weaken at the same time, the selloff is more like a valuation and position liquidation. Only when prices, orders, and capital expenditure all turn downward together could it become a true turning point in the cycle.
What you can buy now is “still-tight fundamentals,” but you have to absorb “valuation mean reversion after a several-multiple rally.” This isn’t without opportunity, but it’s more suitable to observe in batches rather than bet all your judgment on a single day’s drop in the stock price.