Key Points
-
Investor worry over China and AI volatility scared Sandisk investors this week.
-
Today, they remembered that so long as AI hyperscalers are spending, Sandisk will do fine.
- 10 stocks we like better than Sandisk ›
Is Sandisk (NASDAQ: SNDK) stock just a momentum stock now?
It really feels like it lately. After falling nearly 37% over the past four trading days, shares of the NAND semiconductor memory stock exploded this morning, surging 21.5% through 10 a.m. ET.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Competing “narratives” about what’s going on in artificial intelligence may be the reason.
Image source: Getty Images.
Several theories on what’s happening with AI
HSBC analyst Alastair Pinder explains that high profit margins at Sandisk and other memory stocks have attracted the attention of China, which hopes to flood the market with cheap, mass-produced memory chips, undercut Western companies’ pricing, and steal market share.
The recent IPO of Chinese DRAM manufacturer CXMT illustrated the risk, raising $8.5 billion in a day to fund its expansion. And while this isn’t an immediate threat to Sandisk (which doesn’t make DRAM), it highlights a risk if Chinese NAND manufacturers follow CXMT’s lead.
This theory explains 20% of recent market volatility, says Pinder. “AI positioning capitulation” explains another 26%. Here, investors frustrated by continual pops and drops among semiconductor stocks are fleeing the sector and buying defensive stocks instead. Combined, these two theories explain most of the recent selling in semiconductors.
The opinion Sandisk fans prefer
But now here’s the theory that has investors excited about semiconductors, and Sandisk especially, this morning:
37% of market volatility — upside volatility — comes when investors believe that AI hyperscalers such as Google, OpenAI, and Anthropic are overspending on AI capacity. These companies may never see a profitable return on their investment if revenue fails to grow as fast as spending. Meantime, though, all this spending on AI memory chips does benefit Sandisk immensely.
Strange as it sounds to say it, bad news for AI hyperscalers should be good news for Sandisk.
Should you buy stock in Sandisk right now?
Before you buy stock in Sandisk, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sandisk wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!*
Now, it’s worth noting Stock Advisor’s total average return is 889% — a market-crushing outperformance compared to 203% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 30, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
