SanDisk (NASDAQ: SNDK) stock’s remarkable 5,302% rally since it got spun off from Western Digital (NASDAQ: WDC) in 2025 came at the cost of SNDK flashing a strong sell signal after becoming one of the most overbought equities in history.
Specifically, by the time the markets closed on Friday, June 12, the memory firm saw its relative strength index (RSI) cross above 99 on a scale that tops at 100.
While such a reading would traditionally be a strong sell signal, SanDisk’s relatively brief time as a separate public company in its current iteration and the narrative-driven nature of the wider ongoing rally make determining if SNDK is bound for a correction difficult to gauge.
Why SanDisk stock might not be a ‘Sell’ despite record high RSI
Indeed, the company owes much of its success to the ongoing artificial intelligence (AI) boom, and the backing it received from Jensen Huang’s remarks that memory represents the next major technological bottleneck, and from the buying activity of the increasingly popular Leopold Aschenbrenner.
Should the prevailing Wall Street narrative remain relevant in the coming years, there is little reason for SanDisk stock to halt its overall uptrend, even if it suffers temporary corrections.
Indeed, the various notes issued in recent months regarding the sector almost universally foresee the hardware shortages – and elevated prices – to remain a factor at least until 2028.
Similarly, Nvidia’s (NASDAQ: NVDA) CEO opined that memory will remain a significant factor for years to come, effectively forecasting firms like SanDisk can expect to benefit from market undersupply and high demand long-term.
Elsewhere, the historical patterns from a different company in an adjacent industry – Micron (NASDAQ: MU) – indicate that an SNDK stock correction is not imminent.
Specifically, MU shares have historically enjoyed up to a year of continued soaring even after their RSI hit overbought levels, indicating a possibility that the technical sell signal does not guarantee an immediate sell-off.
SanDisk stock performance in June 2026
Looking at SanDisk stock’s short-term performance, it would appear that investors have not taken the sky-high RSI as a warning signal by press time on June 15.
After SNDK shares rallied 619.41% year-to-date (YTD), they extended their last-session 5.24% gains by rising another 5.93% with a rise from $1,980.10 at the latest closing bell to $2,097.57 in the Monday pre-market.
Still, it is worth noting that the situation in the extended session is peculiar on account of the Sunday memorandum of understanding (MOU) – sometimes reported as a peace deal – between Iran and the U.S., providing powerful external headwinds across most sectors.
How a massive SanDisk stock sell-off could start
Lastly, SanDisk stock could soon turn into a sell regardless of technical analysis (TA) signals. June brought a heated discussion over the costs of AI as some retail users were also moved to usage-based billing.
The debate has led to a trend of companies – including central firms such as Meta Platforms (NASDAQ: META) – scaling down their usage of the technology.
Considering the scale of investments in the sector and the degrees of debt various major firms have taken on to fund their AI program, a shift could prove devastating for company revenues and valuations across big tech.
With its exceedingly high RSI and the scale of its overall rally, SNDK stock could prove especially vulnerable to a sell-off.
Featured image via Shutterstock
