Why SandiskStock Dropped (Again) on Friday
Key PointsCXMT spooked Sandisk investors with a tech advance in DRAM this week.
On a Friday, investors in Sandisk (SNDK -3.80%) saw their stock decline for the third day in a row, with a further 3.2% drop as of 10:45 a.m. ET. Despite this, there isn't any new negative news to add to the existing concerns. CXMT, a Chinese DRAM specialist, announced progress on its new 4F square technology, aiming to increase DRAM storage density and potentially release a product before the end of the year.
This development has been a source of investor fears, contributing to Sandisk's 15% loss this week. However, the U.S. Department of Labor's September Consumer Price Index data also raised concerns. Inflation rose 3.7% year-over-year, faster than expected, which could prompt the Federal Reserve to raise interest rates. Generally, higher inflation leads to increased borrowing costs, which can negatively impact tech companies reliant on debt to purchase memory chips.
However, CXMT's technology is specific to DRAM, while Sandisk focuses on NAND flash memory. Therefore, CXMT's advancements are unlikely to pose a significant threat to Sandisk's operations.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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