SanDisk (SNDK) extended its decline in early trading on October 13 as semiconductor shares weakened across global markets. The Nasdaq-listed storage company traded near $1,446.09 before the opening bell, down 2.8%. Shares had finished the prior session at $1,487.33 after falling 5.97%, leaving the stock roughly 39% below its annual high of $2,354.39.

Selloff Spreads Through the Chip Sector

Asian semiconductor stocks dropped on Tuesday after American chipmakers suffered losses the previous session. Samsung Electronics and SK Hynix both came under selling pressure as investors questioned how long memory prices could hold their ground. Memory chips are commodity-like products whose prices swing with the balance of industry supply and demand, which is why pricing durability draws such close investor attention.

Broadcom CEO Hock Tan added to the concerns on Monday. He warned that limited investment capital could constrain AI expansion and compared some speculative spending to casino gambling. His remarks came amid rising scrutiny of how data center projects are being financed, intensifying a debate that has been building around the funding behind the AI buildout.

The broader retreat also reached Nvidia. Its recent reversal followed questions about data center spending and competition from custom chips, adding to caution across technology shares. Chipmakers now face closer attention heading into upcoming earnings reports.

NAND Margins Face Questions Before Earnings

NAND flash is the storage technology behind SSDs, smartphones, and data center drives, so shifts in memory pricing feed directly into suppliers' margins. SanDisk reported $8.97 billion in revenue for its fiscal fourth quarter. Non-GAAP gross margin reached 84.6%, driven in part by stronger memory pricing and growing data center demand. Management forecast revenue between $10.3 billion and $10.8 billion for the next quarter.

Chinese memory manufacturers, including CXMT, are making advances that have raised competition concerns. Although CXMT focuses on DRAM—the other major memory category alongside NAND—investors are watching supply growth across the memory industry as a whole. Samsung's preliminary quarterly results also fell short of analyst estimates despite posting record operating profit.

Microsoft's AI chip strategy adds another dimension to the spending debate. The company is developing its own processors to improve efficiency, while chip suppliers face questions about future infrastructure budgets.

Analyst Targets Contrast With Weak Price Action

Rosenblatt analyst Kevin Cassidy assigned SanDisk a Buy rating and a $2,400 price target. He cited growing demand for NAND storage and customer agreements that could cover 65% of fiscal 2028 output, spread across eight major customers. Mizuho raised its target to $2,050 on October 6. The bullish targets from Wall Street stand in stark contrast to the stock's recent slide.

The contrast reflects the tension between analysts' demand-driven outlooks and the market's nearer-term questions about AI spending and data center financing. The divergence comes as a report on AI stock concentration describes investors' wider exposure to the technology trade amid renewed scrutiny of semiconductor valuations.

SanDisk faces possible support between $1,350 and $1,400, with $1,200 as another level if selling continues. Resistance stands near $1,490 to $1,500. The company's October 29 earnings report is expected to bring fresh information about NAND pricing, demand, and margins, making it the next scheduled checkpoint for the memory pricing debate and the analyst targets above.

Source: SanDisk (SNDK) Stock Falls Despite Wall Street's Bullish Targets, Blockonomi.