Why Is SandiskStock Still Dropping?

Sandisk (SNDK -5.47%) stock has been on a steady decline for the fourth consecutive day on Thursday, following an announcement on Monday by CXMT, a Chinese DRAM company. CXMT claims to have developed a revolutionary 4F square technology that boosts DRAM storage density and threatens to steal market share from Sandisk. Consequently, Sandisk's stock has plummeted by 8.1% as of 9:50 a.m. ET, and a staggering 18% this week.

Global market intelligence firm Trendforce predicts that CXMT holds around 9.5% of the global DRAM memory market, placing it in fourth place behind Samsung (39.4%), SK Hynix (24.9%), and Micron (MU -2.79%), which commands a 23.3% share.

Despite the ongoing decline, Sandisk does not manufacture DRAM; they specialize in NAND flash memory. Consequently, investor concerns regarding CXMT's advancements in 4F square technology may not significantly impact Sandisk's stock performance. In fact, a note from KeyBanc analyst John Vinh suggests that as Sandisk's stock continues to decline, it might be an opportune time to buy, as memory supply remains limited.

Vinh predicts that DRAM prices will increase by 15% to 20% year-over-year in Q4 2026, while NAND prices will rise by 20%.

High-bandwidth memory, which is CXMT's weakest segment, could experience prices rising between 80% and 100% in Q1 2027. This scenario implies sustained high prices for memory makers like Sandisk. Consequently, despite the sell-off, Vinh believes that buying Sandisk stock today is a wise decision.