After sustaining its staggering 7,000% rally to $2,354.39 for approximately a year, SanDisk (NASDAQ: SNDK) stock began a plunge in late June that took it roughly 57% lower and to $1,015.89 by the July 29 closing bell.
The massive rise and the steep plunge simultaneously ensured that the equity’s SNDK relative strength index (RSI) moved, in just over ona months, between two opposite extremes.
Specifically, SNDK shares became the most overbought stock in history by mid-June, with the reading exceeding 99 shortly before the collapse began.
On the flip side, SanDisk equity more recently turned highly oversold, as its RSI reading fell below 33 – the lowest number since early March 2025 – in the wake of the fall toward $1,000 per share.
Overall, the technical signal generated at the end of the July 29 session hints that SNDK stock’s downturn might be nearing its end. Indeed, while the RSI drop early in 2025 did not immediately yield an upsurge, it preceded the rally that eventually took SanDisk some 7,000% higher from roughly $37 to $2,354.39.
The scale of the year-long rise was sufficient for the memory giant to still be 2,670% in the green relative to the day it was spun off from Western Digital (NASDAQ: WDC).
Is SanDisk stock a good investment?
Still, SanDisk turning oversold should not be interpreted as an immediate ‘Buy’ signal. Together with the previous rally generating significant selling pressure, SNDK stock belongs to a sector that has been facing mounting scrutiny in recent months, and that saw multiple other major technology companies suffer substantial losses.
Starting in the second quarter (Q2), investors have become skeptical toward the artificial intelligence (AI) ‘boom’ due to the sheer amount of money the associated buildout has consumed and the dubious – though often vaguely signalled as large – return on investments.
With SanDisk owing most of its success to the AI industry, the wider instability is likely to bear heavily on SNDK equity until the sector finds firmer ground.
Notably, Microsoft’s (NASDAQ: MSFT) latest earnings were welcomed by shareholders, indicating that a return to optimism might be close, though Meta Platforms’ (NASDAQ: META) results cast doubt on the potential reversal.
Lastly, another potential danger for the memory giant and American big tech comes from South Korea, as the country’s technology-heavy stock market has been facing severe volatility with the benchmark KOSPI index dropping nearly 40% since late June.
Wall Street remains bullish on SanDisk stock despite recent headwinds
Elsewhere, the latest downturn has not dampened Wall Street analysts’ confidence in SanDisk stock. Four out of six notable expert notes issued since July 1 featured positive recommendations for SNDK shares, and none rated the equity as a ‘Sell.’
More broadly, the memory giant is regarded as a ‘Strong Buy’ by major institutions and is, on average, expected to rise 102.04% to $2,052.50 in the coming 12 months, per the data Finbold retrieved from TipRanks on July 30.
Featured image via Shutterstock
