SanDisk Shares Drop Over 10% on Tech Sell-Off, Reports 97% Revenue Growth
SNDK•SanDisk shares fell over 10% on June 26 as technology stocks slid led by sticky inflation and AI valuation concerns, magnified by OpenAI’s IPO delay impacting chip demand. The company reported 97% sequential revenue growth in its latest quarter, driven by AI-driven memory shortages and locked-in multiyear contracts.
1. Tech-Led Sell-Off Triggers Double-Digit Decline
On June 26, SanDisk shares plunged over 10% as broader technology stocks weakened following fresh inflation data and mounting AI valuation worries. The sell-off reflected investors’ growing concern over high-capex requirements and potential demand slowdowns in semiconductor markets.
2. OpenAI IPO Delay Dampens Near-Term Chip Orders
Reports of OpenAI postponing its IPO until next year removed a significant source of near-term demand for AI chips, given its $1.4 trillion data center commitments. This delay added pressure on memory suppliers like SanDisk, which count on large-scale AI buildouts to sustain order growth.
3. Stellar Quarterly Revenue Growth from Memory Shortages
Despite the share decline, SanDisk posted 97% sequential revenue growth in its most recent quarter. The surge was driven by severe memory chip shortages amid the AI buildout, allowing the company to command higher prices on key storage products.
4. Multiyear Contracts Support Longer-Term Outlook
SanDisk has secured locked-in multiyear contracts with major cloud and AI customers, providing visibility into revenue streams beyond the current cycle. These agreements, combined with ongoing memory scarcity, suggest resilient demand over the next several quarters.
