Sandisk Plummets 8.95%: What's Behind the Sudden Downturn?

Summary
• Sandisk (SNDK) plunges to $118.07, down 8.95% from its 52-week high of $137.05
• Edgewater Research warns of subseasonal NAND demand in H2 2025, triggering sell-off
• Recent product launches and spin-off from Western Digital (WDC) contrast with today’s sharp decline

Sandisk’s intraday collapse has stunned investors, with the stock trading near its 52-week low of $27.885. The move follows a bearish report from Edgewater Research, which forecasts weaker demand and pricing for NAND flash memory in the second half of 2025. Despite recent product innovations and a strategic spin-off, the stock’s volatility underscores the cyclical risks inherent in the semiconductor sector.

Edgewater Report Casts Shadow Over NAND Demand
The sharp selloff in Sandisk shares is directly tied to Edgewater Research’s bearish outlook on NAND flash memory markets. The firm warned that demand and pricing, which saw a surge in H1 2025, will weaken in the second half. This forecast has rattled investor confidence, particularly as Sandisk’s Q3 2025 results showed a net loss of $1.9 billion—a stark contrast to the $27 million profit in the same period last year. The report’s ‘subseasonal’ demand projection for H2 2025 has amplified fears of oversupply and margin compression, triggering a flight to safety in the sector.

Semiconductor Sector Reels as Micron Also Slides
Sandisk’s decline mirrors broader weakness in the semiconductor sector. Micron Technology (MU), a key NAND competitor, fell 5.01% intraday, reflecting shared vulnerabilities in the memory market. Edgewater’s report has cast doubt on the sustainability of recent price gains in NAND, which had been driven by AI and data-center demand. The sector’s sensitivity to cyclical shifts—exacerbated by Edgewater’s bearish call—has created a risk-off environment, with investors reevaluating exposure to memory stocks.

Options Playbook: Capitalizing on Volatility and Key Levels
• MACD: 15.87 (bullish divergence), Signal Line: 15.14, Histogram: 0.73 (positive momentum)
• RSI: 68.66 (neutral), Bollinger Bands: Upper $137.56, Middle $108.32, Lower $79.08
• 30D MA: $93.47 (below current price), 100D MA: $58.25 (far below)

Sandisk’s technicals suggest a short-term bullish trend, but today’s sharp drop has created a volatile setup. Key support levels at $117.50 (intraday low) and $108.32 (Bollinger Middle Band) are critical for near-term direction. A break below $117.50 could accelerate the decline toward $79.08, while a rebound above $137.56 might signal a short-covering rally. Given the sector’s fragility, a cautious approach is warranted.

Top Options Plays:
• SNDK20251017P115 (Put):
- Strike: $115, Expiration: 2025-10-17, IV: 103.11%, Leverage: 20.96%, Delta: -0.400, Theta: -0.161, Gamma: 0.021, Turnover: 171,315
- IV (high volatility), Leverage (amplifies downside), Delta (moderate sensitivity), Theta (modest time decay), Gamma (responsive to price swings).
- This put option offers asymmetric upside if Sandisk breaks below $115, with high implied volatility and liquidity ensuring execution flexibility.
• SNDK20251017P118 (Put):
- Strike: $118, Expiration: 2025-10-17, IV: 101.52%, Leverage: 16.86%, Delta: -0.467, Theta: -0.119, Gamma: 0.022, Turnover: 33,254
- IV (elevated), Leverage (moderate), Delta (strong downside bias), Theta (lower decay), Gamma (high sensitivity).
- Ideal for aggressive short-term bearish bets, this contract benefits from Sandisk’s current momentum toward support levels.

Payoff Estimation:
- SNDK20251017P115: A 5% downside to $112.17 yields a payoff of $3.17 per contract ($115 - $112.17).
- SNDK20251017P118: A 5% downside to $112.17 yields a payoff of $5.83 per contract ($118 - $112.17).

Action Insight: Aggressive bears should prioritize SNDK20251017P115 for a 5% downside scenario, while SNDK20251017P118 offers higher leverage for a sharper move below $118.

Backtest Sandisk Stock Performance
To build an event-driven back-test we first need to agree on the exact trigger that constitutes a “-9 % intraday plunge.” Could you please confirm the definition you’d like us to use?1. Reference point • Previous-day close (i.e., Low ≤ 0.91 × prior close) • Same-day open (i.e., Low ≤ 0.91 × today’s open)2. Price frequency • Daily OHLC bars (assumes one intraday low per trading day)3. Back-test window • Start: 2022-01-01 • End: today (2025-10-10)Once we lock these in, I’ll automatically identify all qualifying dates, feed them to the event-back-test engine, and show you the post-plunge performance statistics.

Volatility Intensifies: What to Watch Next
Sandisk’s sharp decline reflects the semiconductor sector’s vulnerability to cyclical shifts and bearish sentiment. While technicals hint at a potential rebound above $137.56, the Edgewater report and sector weakness suggest further downside risks. Investors should monitor key levels at $117.50 and $108.32, with a focus on broader NAND demand trends. Micron (MU), down 5.01% intraday, remains a critical sector barometer. For now, a defensive stance is prudent, with options strategies offering asymmetric upside in a volatile environment. Watch for a breakdown below $117.50 or a reversal above $137.56 to gauge the next move.