Why Sandisk Stock Is Falling Today

Sandisk Corporation's stock is experiencing a significant drop, falling by 8.2% on Friday, Nov. 13, as a sell-off in AI hardware continues to impact memory and storage companies. This decline adds to a second day of losses, following a 0.8% drop in the S&P 500 and a 1.3% decline in the Nasdaq Composite. The recent turmoil began with the resignation of Nvidia CEO Jensen Huang on Thursday, following allegations of multiple affairs and potential breaches of U.S. export controls.

These issues have raised concerns among investors about the future of Nvidia and its chip supply, which has been a driving force behind the growth of memory stocks like Sandisk. Sandisk's first-quarter fiscal results, reported at the end of October, were impressive, with sales reaching $11 billion, a remarkable 378% increase compared to the previous year, and a non-GAAP gross margin of 85.1%.

While the memory shortage is expected to persist, the business is known for its cycles of boom and bust. The situation may improve as supply catches up or demand slows due to broader AI trends or technical advancements that reduce the reliance on expensive memory. Analysts remain cautious, noting that the market may eventually stabilize.