Sandisk Corporation (NASDAQ:SNDK) stock was volatile in Wednesday’s premarket session as investors positioned ahead of next week’s earnings report.
Nasdaq futures rose less than 0.5%, while S&P 500 futures gained 0.19%. The memory sector remained in focus after rival SK hynix Inc. (NASDAQ:SKHY) posted a quarterly profit miss.
SK hynix Keeps AI Spending Intact
SK hynix, a key competitor and co-developer with Sandisk of High Bandwidth Flash (HBF) memory technology for AI workloads, reported earnings below expectations but reaffirmed its confidence in long-term AI demand.
The company said it plans to increase 2026 capital spending by about 50% to the high-40 trillion won range, or at least $31 billion, after quarterly operating profit surged more than sixfold. Management said long-term supply agreements with major customers continue to support investment plans.
Executives also dismissed oversupply concerns during the earnings call, saying they would adjust investments based on demand. They expect cloud service providers to continue increasing AI spending beyond 2027 and believe memory supply will remain tight for the foreseeable future.
Earnings In Focus
Sandisk is scheduled to report second-quarter results on Aug. 5, with investors watching whether the stock can stabilize after its sharp retreat from June highs.
Analysts expect earnings of $33.38 per share, compared with 29 cents a year earlier. Revenue is projected to rise to $8.24 billion from $1.90 billion.
The stock trades at about 37.5 times earnings, reflecting a premium valuation that leaves little room for disappointment if results or guidance fall short.
Wall Street maintains a consensus Buy rating with an average price forecast of $1,854.13. Recent analyst actions include:
- Susquehanna: Positive; lowered its price forecast to $3,050 on July 23.
- Wells Fargo: Equal Weight; raised its price forecast to $1,620 on July 22.
- Bank of America Securities: Buy; raised its price forecast to $2,500 on July 1.
Technical Setup Weakens
Sandisk remains above its long-term trend indicators, with the stock trading above its 200-day simple moving average of $827.44 and 200-day exponential moving average of $999.62. That suggests the broader uptrend remains intact.
However, the shorter-term picture has weakened. The stock trades 32.2% below its 20-day simple moving average and 35.5% below its 50-day simple moving average, reflecting a sharp pullback in recent weeks.
The 20-day moving average has also fallen below the 50-day moving average, a bearish crossover that often signals continued near-term selling pressure. Even so, the 50-day moving average remains above the 200-day moving average, indicating the longer-term trend has not yet reversed.
Momentum indicators also point to softer buying interest. The moving average convergence divergence (MACD) remains below its signal line, while the histogram is negative, suggesting bullish momentum continues to fade.
Key resistance sits near $1,313.65, around the 100-day simple moving average. Key support is near $999.62, which aligns with the 200-day exponential moving average and the psychologically important $1,000 level.
Benzinga Edge Rankings
Sandisk carries a Momentum score of 99.88, indicating strong long-term price performance despite the recent pullback.
Its Value score of 12.59 suggests the shares remain richly valued, leaving less room for disappointment if earnings or guidance fall short of expectations.
ETF Exposure
Sandisk is a significant holding in several exchange-traded funds, including:
- Roundhill Memory ETF (NASDAQ:DRAM): 5.42%
- Pacer US Large Cap Cash Cows Growth Leaders ETF (BATS:COWG): 4.63%
- Invesco S&P 500 Pure Growth ETF (NYSE:RPG): 7.29%
Large inflows or outflows in these funds can influence trading activity in Sandisk shares.
Price Action
SNDK Price Action: Sandisk shares were up 0.85% at $1105.39 during premarket trading on Wednesday, according to Benzinga Pro data.
Photo via Shutterstock
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