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SanDisk (SNDK) shares plunged 20% in afternoon trading on Thursday, Nov. 5, extending a two-day selloff in artificial intelligence stocks as investors grew concerned about the future of data center expansion.<\/p>\n
The selling followed Democrats’ sweep of both chambers of Congress and victories in key gubernatorial races in Tuesday’s midterm elections, raising fears that tighter oversight could slow the construction of AI data centers.<\/p>\n
The decline spread across the technology sector. The Nasdaq Composite sank more than 5%, and the iShares Semiconductor ETF (SOXX) tumbled 11%, putting it on track for its worst day since March 2020.<\/p>\n
SanDisk shares have now fallen nearly 65% from their peak of $2,354 to around $827. Still, the stock is up more than 250% year-to-date.<\/p>\n
Why SanDisk stock surged this year<\/p>\n
SanDisk has been one of the biggest beneficiaries of the AI boom, with its shares soaring more than 450% this year through Oct. 29.<\/p>\n
The company makes NAND flash memory, which is used to store data in smartphones, computers, and data centers.<\/p>\n
AI companies need huge amounts of storage to train models. That demand has helped tighten NAND supply and push prices higher, boosting SanDisk’s revenue and profit margins.<\/p>\n
Also read: Non-AI stock surges 20% after earnings beat and raised outlook<\/p>\n
The company has also benefited from its separation from Western Digital in February 2025, which gave investors a way to invest directly in its flash memory business.<\/p>\n
The rally accelerated earlier this year as major technology companies increased spending on AI infrastructure, while memory manufacturers struggled to keep up with demand.<\/p>\n
But after such a steep run, SanDisk has become vulnerable to any signs that AI spending could slow or memory prices might be approaching a peak.<\/p>\n
SanDisk shares have now fallen nearly 65% from their peak of $2,354 to around $827. Still, the stock is up more than 250% year-to-date.<\/p>\n
SOPA Images \/ Getty Images<\/p>\n
SanDisk beats earnings estimates, but analysts turn cautious<\/p>\n
On Oct. 29, SanDisk reported fiscal first-quarter revenue of $11.03 billion, beating Wall Street’s estimate of $10.70 billion. Adjusted earnings reached $49.51 per share, above expectations of $46.41.<\/p>\n
Data center revenue climbed to $4.80 billion, up 61% from the previous quarter.<\/p>\n
Also read: Intel stock plunges 20% as chipmaker warns of tough year ahead<\/p>\n
“We have started fiscal year 2027 with another quarter of strong performance, with robust and growing demand for our products driving outpaced growth in our data center business,” CEO David Goeckeler said in a statement.<\/p>\n
SanDisk also forecast fiscal second-quarter revenue of $12.2 billion to $12.6 billion and adjusted earnings of $55 to $57 per share. Analysts had expected revenue of $12.29 billion and earnings of $53.35 per share.<\/p>\n
Despite the earnings beat, Wall Street has become more cautious about the stock’s valuation.<\/p>\n
On Oct. 30, RBC Capital lowered its price target on SanDisk to $1,400 from $1,600, maintaining a Sector Perform rating after the earnings, The Fly reported.<\/p>\n
The firm said SanDisk’s results and outlook exceeded expectations thanks to continued NAND pricing strength, but reduced its target to reflect declining valuation multiples across the memory sector.<\/p>\n
Related: Billionaire Bill Ackman’s market warning resurfaces as stocks plunge<\/p>\n
#SanDisk #stock #plunges #selloff #deepens #strong #earnings<\/p>\n","protected":false},"excerpt":{"rendered":"
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