Why Sandisk Stock Just Dropped
Key Points
One of Sandisk's biggest backers just warned: High prices are depressing memory demand.
This quarter still looks good for Sandisk, but beware Q1 2027.
Up an astounding 3,756% in a year, investors are beginning to wonder: Will Sandisk (NASDAQ: SNDK) stock ever run out of gas? (Or has it started to already?)
Powered by a big earnings beat, shares of the popular computer memory-maker went on a six-day run through Wednesday, but are tumbling 4.4% through 11:15 a.m. ET today -- and you may want to blame Wall Street analyst Bernstein for that.
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What Berstein says about memory
Today's note from Bernstein starts off positive, talking about how both NAND and DRAM prices are set to see a "major increase in 2QCY26" -- even more than Bernstein already predicted. Problem is, the analyst is now seeing mixed signals from the spot market for semiconductor memory.
The laws of supply and demand still work, you see, and with memory prices getting more expensive, memory demand is taking a hit. Whether or not they want to, "OEMs & module houses [are being forced to] reduce their purchases," says Bernstein today in a note covered on StreetInsider.com.
As a result, the analyst thinks we'll see price increases "decelerate notably into 3QCY26."
What does this mean for Sandisk?
This is where things get a bit confusing, so bear with me here: Bernstein's guidance is discussing calendar years, forecasting prices to rise in the quarter ending in June and then potentially fall in the quarter ending in September.
Sandisk's fiscal calendar is different, calling the June quarter "Q4" and the September quarter "Q1 2027." For Q4, Sandisk guided last week to $8 billion in sales, rising gross margins, and profits between $30 and $33 per share. If Bernstein's right, those numbers should remain intact, and Sandisk should do just fine in Q4.
It's Q1 2027 you need to worry about, though -- and that's coming up fast.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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