TradingKey - SanDisk shares plunge 11% post-earnings, with the $1,000 threshold facing another test.

On August 6, Eastern Time, SanDisk ( SNDK) shares fell below the $1,200 threshold, plunging over 11% in pre-market trading to temporarily stand at $1,199.31, basically erasing this week's gains. In the five trading days leading up to the earnings release, SanDisk experienced a bottoming-out rebound near the low of $1,000, with its stock price staging a strong rally, surging nearly 40% to break through $1,400.

During yesterday's after-hours trading, Q4 FY2026 financial results showed both revenue and profit exceeding expectations, and the board of directors approved a $14 billion share buyback program. Meanwhile, SanDisk provided Q1 FY2027 revenue guidance with a midpoint of $10.3 billion to $10.8 billion, basically in line with the market expectation of $10.8 billion, though it fell short of the exceptionally high target of $11.1 billion called for by some buy-side institutions.

Although SanDisk's financial data was decent, its stock was still sold off, reflecting a shift in Wall Street's trading mentality and deep structural concerns, and even pointing to a lack of market confidence in the broader industry. These concerns include worries over the peaking of the NAND Flash upcycle and price hikes, strong edge and data center demand coupled with a weak consumer market, and a tendency for capital to lock in profits on rallies amid the broader environment where U.S. semiconductor and AI sectors are scrutinizing the return on investment (ROI) of AI.

Currently, although Wall Street investment banks have not issued a sell rating on SanDisk, their price target cuts have nonetheless impacted the market. Among them, Citi lowered its price target from $2,500 to $2,100, a 16% reduction; Wells Fargo cut its target by over 13% from $1,620 to $1,400. Notably, both investment banks had raised their targets just about a month before SanDisk released its earnings.

After briefly rebounding to break through $1,305 (the 0.236 Fibonacci level), SanDisk's stock price has now fallen back below this level, indicating that bulls have given up their resistance, with the defensive line dropping to around $1,000. If this threshold is lost again (which occurred once in late July), it will completely open up further downside space, potentially pulling the price down to around $500 before the end of the year.

SanDisk stock chart, source: TradingView