SanDisk Tumbles 14% as Analyst Optimism Collides with Sector Rotation and Split Speculation

SanDisk stock drops 14% amid sector rotation from AI hardware, ignoring bullish price targets from Bernstein and BofA. Insider selling and Apple's shift to cheaper memory suppliers add risk.

SanDisk shares took a brutal hit at the end of last week, plunging more than 14% to settle at $1,745. The sharp decline—part of a broader 26% retreat from the stock’s all-time high—marks a jarring interruption to what has been one of the market’s most spectacular runs. Since its spin-off from Western Digital in early 2025, SanDisk has surged roughly 5,500%, powered by insatiable demand for NAND flash memory from AI data centers.

The selloff came as a stark contrast to the chorus of bullish analyst notes hitting the wires. Bernstein dramatically raised its price target from $1,700 to $3,000, citing new long-term supply agreements that lock in pricing and stabilize revenue. Bank of America’s Wamsi Mohan joined the fanfare, lifting his target to $2,500 on expectations of a tight NAND supply environment through mid-2027. Citigroup chimed in with the same $2,500 figure.

The optimism on Wall Street is anchored in the underlying market dynamics. In the first quarter of 2026, global NAND revenue reached approximately $46 billion, a staggering 246% increase year-over-year. SanDisk, as a pure-play NAND producer, has been a prime beneficiary of the supply crunch, especially as rivals SK Hynix and Micron have pivoted toward specialized chips for AI workloads.

Mohan’s forward-looking estimates are particularly aggressive. He projects SanDisk will report revenue of $9.1 billion in its upcoming quarterly results, with earnings per share of $37.01. Management itself has guided for no more than $8.25 billion in sales, setting the stage for a high-stakes earnings report.

Yet the market appears to be ignoring this wave of analyst enthusiasm. A violent rotation is under way on Wall Street: investors are dumping AI hardware names and rotating into software stocks. SanDisk, along with peers Micron Technology and Western Digital, has been caught in the crossfire. The stock’s valuation had become stretched—its price-to-earnings ratio sat at 77 before the selloff—leaving it vulnerable to any shift in sentiment.

Beyond the sector rotation, tangible operational risks are weighing on the narrative. Company insiders have sold nearly $9 million worth of shares over the past three months. Meanwhile, industry sources say Apple is exploring cheaper memory chips from Chinese suppliers, which could pressure SanDisk’s pricing power going forward.

The recent correction has also revived speculation about another stock split. SanDisk has already split its shares twice since the spin-off, and with the price still hovering around $1,750 despite the pullback, many analysts consider a third split plausible. The company’s management has remained silent on the topic, while focusing on a $6 billion share buyback program and the negotiation of long-term supply contracts. The logic is that an unannounced split avoids regulatory complications—and the clock is ticking. If the stock recovers to the $2,500 level within the next twelve months, the pressure for an official announcement will only intensify.

For now, the market is demanding proof. The upcoming quarterly report will need to validate the double-digit revenue estimates that analysts have baked into their models. A miss could fuel further rotation out of the storage sector. But given the 5,500% rally since the spin-off, the bulls still have plenty of runway—if the numbers hold up.