Sandisk Shares Pull Back From Record Highs as Investors Weigh AI Spending and Market Competition
Shares of memory specialist Sandisk (NASDAQ:SNDK) have experienced a notable pullback after reaching a 52-week high on June 22. Despite surging 827% over the past year, the semiconductor stock has dropped 44% from its peak, driven by investor anxieties surrounding the long-term sustainability of the NAND flash market’s supply-demand dynamics and the viability of ongoing artificial intelligence infrastructure expenditures.
Additional market unease stems from potential competitive pressures originating in China, though industry watchers suggest these concerns may be exaggerated. The recent market turbulence intensified in July after Chinese memory company ChangXin Memory Technologies (CXMT) went public, sending ripples through the broader memory sector alongside its stated ambitions to develop advanced dynamic random-access memory (DRAM) chips.
However, market analysts note that Sandisk does not directly compete with CXMT. While CXMT focuses on DRAM technology, Sandisk specializes in NAND flash storage products, a market segment that CXMT has not yet entered. Furthermore, reports indicate that CXMT’s current DRAM technology lags behind established industry leaders such as Micron Technology and SK Hynix. Because CXMT has reportedly sought pricing par with major manufacturers like Samsung and SK Hynix, meaningful disruption in the DRAM sector appears unlikely until its technological claims materialize.
Market reactions to Chinese tech developments have previously triggered similar corrections. The early 2025 launch of DeepSeek sparked brief fears regarding a potential slowdown in high-end AI infrastructure spending, yet global AI utilization has continued to expand.
On the supply side, evidence supporting a collapse in the NAND flash industry’s favorable balance remains scarce heading toward 2027. The artificial intelligence boom has generated robust demand for NAND flash-based enterprise solid-state drives (SSDs), which Sandisk manufactures. Resulting supply shortages have driven significant price increases, with enterprise SSD contract prices reportedly tripling year over year during the previous quarter.
Long-term projections remain positive for the sector. McKinsey anticipates that enterprise SSD demand will expand at an annual rate of 35% through 2030 under a base-case scenario, while market research firm IDC projects global SSD revenue growth exceeding 40% annually through the same period. Additionally, YMTC, China’s state-backed NAND flash manufacturer, reportedly does not expect the current supply crunch to ease until 2029, potentially insulating market participants from immediate oversupply.
During its August Investor Day presentation, Sandisk reported a total addressable market target of $500 billion for the upcoming year. Having posted $20 billion in revenue in fiscal 2026 and holding an 11% share of the NAND flash market according to Counterpoint Research, the company anticipates mid-to-high teen annual revenue growth between fiscal 2028 and fiscal 2030.
Financial projections also point toward margin expansion. Sandisk aims to increase its non-GAAP operating margin to 75% by fiscal 2030, building upon the 63% margin recorded in fiscal 2026. Consensus estimates tracked by Yahoo! Finance project earnings per share to reach $214.82 in fiscal 2027 and $266.30 the following year, supported by strong enterprise demand and disciplined capital allocation.
