SanDisk stock extended its sell-off and fell to its lowest level since April, dropping 65% from its highest point this year as the broader artificial intelligence rout accelerated. Despite the decline, valuation metrics suggest the shares may be undervalued. According to Seeking Alpha data, SanDisk has a forward price-to-earnings ratio of 3.90, far below the technology sector median of 20.25.
The company's latest results showed first-quarter revenue rose 23% sequentially and 378% year over year, while quarterly profit jumped to $8.1 billion from $112 million in the same period last year. Management expects revenue growth to continue. Analysts forecast second-quarter revenue will rise 313% to $12.5 billion, with annual revenue up 144% to $50 billion. SanDisk has also signed long-term contracts with top hyperscalers that set floor and ceiling prices, reducing downside if the memory cycle turns.
Wall Street views remain mixed. Bank of America analysts predicted the memory supercycle will continue through 2028, while Morgan Stanley expects DRAM pricing to peak in the current quarter and the cycle to elongate rather than collapse. Goldman Sachs sees the shortage persisting through 2028, while JPMorgan expects a pricing downcycle later next year. Wells Fargo reduced its SanDisk target from $1,550 to $1,300, and RBC lowered its target from $1,600 to $1,400. Susquehanna, Cantor Fitzgerald, and Zacks also lowered their outlooks.
Technical analysis shows SanDisk has fallen from a record high of $2,355 in June to about $860. The stock dropped below the July support level of $998, below the 61.8% Fibonacci retracement level, and below the Supertrend indicator. It has formed what appears to be an inverted cup-and-handle pattern, and the chart suggests a possible continuation toward the 78.6% retracement level near $537 before a potential rebound.
Overnight trading brought a reversal after CoreWeave reported a 168% jump in quarterly revenue to $3.66 billion and a record $132.5 billion revenue backlog. Micron gained about 2.8%, SanDisk climbed 2.5%, and a US-listed SK Hynix instrument advanced 4%. CoreWeave raised its 2026 revenue forecast to $13 billion to $13.3 billion and said demand for its computing services was roughly ten times the capacity available through 2027. Adjusted operating income reached $379 million.
The earnings matter for memory manufacturers because AI server buildouts require high-bandwidth memory, conventional DRAM, and large amounts of storage. CoreWeave has signed long-term supply agreements with Micron and SanDisk, while a separate deal with SK Hynix subsidiary Solidigm gives it priority access to enterprise solid-state drives. Micron's fiscal fourth-quarter revenue reached $54.23 billion. SanDisk's data-center revenue climbed 61% quarter on quarter to approximately $4.8 billion. SK Hynix expects HBM4 to become its main high-bandwidth memory product this quarter and has agreements covering more than half of its expected production capacity for 2027 and 2028. KeyBanc analyst John Vinh maintained a $1,750 Micron target, and Baird's Tristan Gerra argued memory shortages could persist into 2027.
However, CoreWeave's expansion carries financial strain. The company reported a $709 million quarterly net loss, $846 million in net interest expenses, and $46.9 billion in debt. Capital expenditure reached $14.5 billion during the quarter, and management expects spending of $37 billion to $39 billion for 2026. It anticipates about $9 billion in customer prepayments and deposits over the next three months. Investor David Desjardins warned that SanDisk could prove a valuation trap if additional NAND production comes online as AI infrastructure spending slows.
