SanDisk (NASDAQ: SNDK) stock enjoyed an exceptionally strong run between getting spun off from Western Digital in early 2025 and late June 2026, with a 6,000% upsurge from about $36 to $2,354.
The rally, however, came at a cost of SNDK becoming the most overbought equity in history by mid-June, with its relative strength index (RSI) crossing above 99 and signalling to investors that they should, at least temporarily, refrain from buying.
By press time on July 28, the accuracy of the technical warning is difficult to overstate. On June 15, SanDisk stock was trading at roughly $2,100 and has since crashed 39.36% to $1,278.23.
Under the circumstances, $1,000 invested in SNDK shares just over a month ago would have fallen $393.60 to $606.40 by Tuesday, July 28, making it one of the worst possible investments in a major company for early summer 2026.
Why SanDisk stock plunged 40% in a month
Simultaneously, SanDisk stock’s reversal appears driven by a variety of factors, of which the first – and possibly strongest – is the common phenomenon of an equity suffering a correction following a strong rally.
SNDK price performance certainly backs such a view given that the shares managed to rise above $2,335 in the days immediately after the RSI flashed the sell signal before finally giving way to downward pressure.
Still, other factors pressuring the business should not be discounted. To begin with, there has been a general unease in the market concerning companies heavily involved – and heavily dependent – on the artificial intelligence (AI) ‘boom.’
The price impact of the shareholder anxiety can be seen in Nvidia’s (NASDAQ: NVDA) sluggish performance in 2026 and the overall decline since May, as well as in the immediate backlash Google (NASDAQ: GOOGL) suffered after disclosing plans to increase AI capital expenditures (CapEx) further.
SanDisk has fueled its growth by becoming a critical memory supplier for the artificial intelligence infrastructure buildout, making its latest stock market drop something of a natural extension of the wider crisis of confidence.
Unfortunately for the company, the downturn could extend far into the future even if investor conviction in the value of AI CapEx recovers, given China’s aggressive push to develop internal alternatives for essentially every technological service and product that has traditionally been the West’s demesne.
What is next for SanDisk stock?
Nonetheless, Wall Street experts appear to have determined long-term risks for SanDisk’s business and SNDK stock as ephemeral. Indeed, the equity remains, overall, viewed as a ‘Buy’ by institutional analysts, per the data Finbold retrieved from TradingView on July 28.
Additionally, Wall Street is showing conviction that SNDK stock can reclaim the highs it reached in late June, as the average 12-month price target for SanDisk shares stands at $2,363.65 – 84.92% above the most recent close.
Featured image via Shutterstock
