There is a peculiar moment in every cyclical boom when the fundamentals look flawless and the smartest money in the room quietly heads for the door. SanDisk shareholders witnessed exactly that tableau this week, as David Tepper’s Appaloosa Management liquidated its entire position in the memory-chip maker during the second quarter of 2026 — a stake valued at $178.7 million.
The timing is almost perverse. SanDisk had just delivered what can only be described as a blowout fourth fiscal quarter, with revenue of $8.97 billion, up 51 percent sequentially and a staggering 372 percent year over year. Net income for the quarter came in at $6.90 billion, while adjusted earnings per share of $39.25 sailed past analyst estimates. The full-year picture is equally imposing: $20.25 billion in revenue, a 175 percent jump, with net profit of $11.43 billion and gross margins of 84.6 percent.
Yet the stock has become a study in contradiction. After the earnings release in early August, shares tumbled 12.1 percent in after-hours trading. The culprit wasn’t the numbers themselves but the fear that the extraordinary run-up in NAND flash prices has peaked.
The Price Machine Loses a Gear
The arithmetic behind SanDisk’s recovery is straightforward but fragile. Two-thirds of the recent revenue surge came from higher prices, with only one-third attributable to increased shipment volumes. Contract pricing for 1-terabyte TLC NAND chips rocketed from $4.80 in July 2025 to $10.70 by November 2025 — a 122 percent climb. But the latest quarter’s contract price growth has decelerated to just 10 to 15 percent, a sharp comedown from the 70 percent-plus advances of previous quarters.
That deceleration is precisely what gives investors pause. If pricing momentum continues to fade, the lever that powered SanDisk’s resurgence loses its force. The company’s own guidance for the first quarter of fiscal 2027 — revenue between $10.3 billion and $10.8 billion, with EPS of $44 to $46 — suggests management sees continued strength, but the market is increasingly skeptical.
Adding to the anxiety is a political wildcard out of Washington. Reports indicate the U.S. government is considering allowing major domestic hardware customers like Apple to source NAND flash from Chinese manufacturer YMTC. Such a move would directly challenge the competitive position of American suppliers and inject fresh downward pressure on prices. When news of this possibility surfaced on August 24, SanDisk shares fell 6.9 percent to $1,486.41, dragging the broader memory sector down with it.
A Structural Squeeze Meets a Cyclical Doubt
For those inclined to look past the quarterly noise, the bull case rests on supply dynamics that appear genuinely tight. Phison CEO Khein-Seng Pua has warned that the global NAND flash shortage will persist into 2027, with capacity already sold out through 2026. New fabrication plants, he notes, won’t come online until late 2027 or 2028 at the earliest. Industry consolidation and capacity discipline have fundamentally reshaped the market’s supply side.
The enterprise SSD data from TrendForce for the second quarter of 2026 underscores the boom: the top five suppliers collectively doubled their revenue to $37.59 billion, up 103.6 percent sequentially. SanDisk ranked fifth with $2.98 billion, growing 102.9 percent — in line with the industry trend rather than outpacing it.
SanDisk is also hedging its bets through long-term commitments. The company has signed ten new agreements with a minimum volume of $93.9 billion and terms of at least four years. Management presented a multi-year financial framework through fiscal 2030 at its investor day on August 13, projecting mid-to-high double-digit revenue growth and adjusted gross margins around 80 percent. The board additionally expanded the buyback program by $14 billion, leaving $15.5 billion in authorization available.
Should investors sell immediately? Or is it worth buying SANDISK?
On the technology front, SanDisk and Kioxia unveiled a ninth-generation flash memory for AI-driven data centers in August — a development that briefly lifted the stock by roughly 8 percent. The two companies are also collaborating on HBF standards, and SK hynix, which holds an indirect 14.19 percent stake in Kioxia through a Bain-led vehicle, is reportedly exploring a new Japan fab with Kioxia, according to an Asahi Shimbun interview. For SanDisk investors, these alliances signal the company is hardly isolated as the industry reshuffles.
The Rotation Question
Tepper’s move invites a straightforward interpretation: a rotation out of cyclical memory and into structural AI compute. Appaloosa simultaneously built a new position in Broadcom, spending $56.7 million on 150,000 shares. Broadcom’s AI semiconductor revenue surged 143 percent in the second quarter to $10.8 billion, with $16 billion expected in the third. The implied bet is that compute demand will prove more durable than the memory cycle.
That reading is plausible but hardly inevitable. The memory market itself is undergoing structural change through consolidation and capacity discipline, which could extend the cycle’s longevity beyond historical patterns.
The insider activity at SanDisk adds another layer of nuance. Several executives, including CEO David Goeckeler and technology chief Alper Ilkbahar, sold share packages in August — though predominantly for tax withholding purposes tied to compensation programs rather than as deliberate market calls. Mizuho trimmed its price target from $1,900 to $1,875 on August 24, citing softer pricing dynamics.
A Stock Caught Between Two Narratives
The share price tells the story of a market wrestling with conflicting signals. SanDisk currently trades at €1,330.00, down 0.8 percent on the day and 3.3 percent below its 50-day average. The stock remains 36 percent below its 52-week high of €2,060.00, reached on June 22, 2026 — a reminder that the early-summer euphoria has largely evaporated despite record results. On a 30-day basis, however, shares are still up 18 percent.
What makes this moment genuinely unusual is the coexistence of historically strong fundamentals with a visible loss of momentum. The NAND market is structurally tight, with capacity sold out and new supply years away. Yet price growth is decelerating, Washington is weighing a competitive threat in YMTC, and one of the most prominent investors in the business has chosen this moment to exit entirely.
For those watching SanDisk, the next price cycle will likely be shaped less by quarterly earnings and more by the capacity discipline of the industry’s major players and the consolidation moves swirling around SK Group and Kioxia. The bull case rests on scarcity persisting longer than skeptics expect. The bear case rests on the simple observation that when David Tepper sells into strength, he usually has a reason — even if that reason won’t be visible in the financial statements for several quarters to come.
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