SanDisk’s 64% collapse: another leg down or buying opportunity?

If you run a small photo studio or know someone who does, you can imagine how quickly storage costs add up. Every client shoot needs to be saved, archived, and kept accessible.

When SSD prices nearly double in a few months, buying enough storage becomes a much bigger expense. I used the small studio example to illustrate how a memory shortage can feel abstract until it shows up on a small business owner’s invoice.

Micron’s $35 billion decision comes with a consumer catch

Cathie Wood raises uncomfortable question about Nvidia-backed stock before earnings

That shortage built SanDisk (SNDK) into one of the most explosive stocks of 2026. In fact, Slickcharts data show it as the best performer YTD until recently, when Moderna passed it, and before the massive drop. SNDK closed near $835.06 on Nov. 6, down 64% from its June 25 all-time high of $2,354.

I remember covering the optimism when it was largely bullish. Lynx Research set a $2,450 target in September, and Mizuho raised its target to $2,050 in October, while Rosenblatt had it at $2,400. Those numbers look distant now, and the fall has happened fast.

Also Read: SanDisk’s stock buyback program explained

Why SanDisk stock broke

SanDisk closed around $1,330 on October 29, the day it reported fiscal first-quarter 2027 results and guided for higher profits. At about $835, that is a 37% drop in less than two weeks.

A selloff in AI data center stocks continued after the Nov. 3 midterm elections, as investors weighed whether the outcome could slow data center construction.

More SanDisk:

SanDisk stock plunges 20% as AI selloff deepens despite strong earnings
Morgan Stanley stands by SanDisk as CFO flags a low-end pullback
SanDisk CFO admits higher prices are hurting consumer sales

There are two other fears. The first is the cycle. Memory has historically been a boom-and-bust business, and investors worry that SanDisk’s roughly 85% gross margin has peaked and that the shortage will turn into oversupply.

The second upcoming issue is China. A recent WSJ report shows that ChangXin Memory Technologies, or CXMT, reported an eightfold jump in sales for the first nine months of the year. That signals more competition ahead.

What SanDisk’s latest results actually showed

Fiscal Q1 2027, which was reported on Oct. 29, was strong. Revenue was $11.0 billion, up 23% sequentially and 378% year over year, according to SanDisk’s earnings release. Data center customers accounted for about $4.8 billion of that. Non-GAAP gross margin was 85.1%. Non-GAAP EPS was $49.51, up 26% from the $39.25 reported for the prior quarter.

For fiscal Q2, management guided to adjusted EPS of $55 to $57. CEO David Goeckeler said demand is “robust and growing for our products,” and pointed to “durable free cash flow.”

Related: Sandisk’s next chip could save cloud giants billions, but not us

There is a slowdown, though. Q2 guidance implies sequential EPS growth of 13% at the midpoint, and revenue growth of 10.9% to 14.5%. That is far below the near-doubling quarters earlier this year. Profits are still rising, but the rate of increase is shrinking quickly. And that is what a stock priced for perfection cannot forgive.

Also remember how fast things change. A year ago, in Q1 fiscal 2026, SanDisk earned just $1.22 per share at a gross margin of around 30%. A company that can move from that to $49.51 can move back.

The SanDisk math: what is a cyclical profit stream worth?

Here is the arithmetic, because this is where the bull and bear cases meet. Take the $56 guidance midpoint and annualize it: $56 × 4 = $224 a share. At $835, the stock trades at about 3.7 times that figure. On trailing four-quarter results, it is around 7 times earnings. Either way, it is cheap. Telling us the market expects profits to fade, not to repeat.

Cyclical earnings deserve a stress test, so let’s try to build a range:

Base case: earnings hold at the guided pace, $224 a year. At 4 times, that supports roughly $896.
Stress case: a supply glut cuts earnings 25%, to $168. At 4 times, that supports roughly $672.

At $835, the stock sits in the upper half of that range. That is not a screaming bargain but a fair price with downside potential. If you like the stock, a better entry would be nearer the lower half, around $750 or below, where the base case gives you some cushion.

The 8-for-1 split changes the look, not the value. Holders of record on Nov. 9 receive the extra shares, and split-adjusted trading begins Nov. 20. Divide everything by eight: $835 becomes about $104, the $224 annualized figure becomes $28, and a $750 entry becomes roughly $94.

SNDK stock is down 64% from its June 25 all-time high of $2,354.

AdrianHancu / Getty Images

Buy SanDisk or wait?

Looking back at the storage invoice, there’s the shortage, and SanDisk is selling into the same demand. The company says multi-year supply agreements will cover about half of shipped bits in 2027, and remaining performance obligations stand at $88.9 billion. That backlog is a genuine cushion if spot prices soften.

The bear case? Growth is slowing, momentum is firmly negative, and a stock that has fallen this far this fast can keep falling. Buying now means trying to catch a falling knife. The trend has not yet shown it can stabilize.

My take is that if you want exposure, size it small and build it in pieces rather than all at once, just as Jim Cramer told his audience on Lam Research in my Oct 31 coverage. Add on weakness toward the lower half of the range. If the stock climbs back above roughly $900 before you buy, the margin of safety is gone, and waiting is cheaper.