Why Sandisk Stock Dropped Again Today

Sandisk (SNDK) shares fell 7.3% after Argus Research initiated coverage with a lukewarm "hold" rating, citing widening concerns about the durability of demand for pricey NAND flash memory chips. While Argus acknowledges Sandisk's strong position in NAND flash driven by AI data center demand, the firm warns that any tempering in demand could trigger a severe reaction in product pricing and the stock, which has already surged over 4,000% this year.

Why it matters: At 60 times trailing earnings, Sandisk looks reasonably valued given forecasts of profits more than tripling next year, but analysts caution that NAND supply will eventually catch up with demand, potentially causing profits to drop dramatically by 2029.