Sandisk (SNDK) Plunges 5.6% Amid AI Manufacturing Expansion and Earnings Anticipation – What’s Next?

Summary
• Sandisk (SNDK) tumbles 5.6% to $120.31, snapping a three-day winning streak.
• Fab2 facility launch in Japan aims to boost 218-layer 3D NAND production for AI demand.
• Q1 earnings announcement scheduled for November 6, with revenue guidance of $2.1B–$2.2B.

Today’s sharp selloff in Sandisk reflects a mix of profit-taking after a recent rally and anticipation of its upcoming earnings report. The stock’s intraday swing from $125.2 to $115.7 underscores heightened volatility as investors weigh the company’s AI-driven growth narrative against near-term execution risks.

AI Manufacturing Expansion and Earnings Anticipation Drive Volatility
Sandisk’s 5.6% decline follows a three-day winning streak, as traders booked profits after the stock surged on AI-related optimism. The launch of the Fab2 facility in Japan, capable of producing 218-layer 3D NAND, has positioned Sandisk at the forefront of AI storage innovation. However, the market is now pricing in near-term risks ahead of its Q1 earnings report on November 6. Analysts highlight that while the company’s AI-driven strategy is bullish, the memory sector’s cyclical nature and $60M in expected fab startup costs in early 2026 could weigh on short-term sentiment. Additionally, the stock’s 70.88 RSI reading suggests overbought conditions, prompting technical selling.

Semiconductor Sector Volatility as Western Digital (WDC) Plummets 4.49%
Sandisk’s selloff aligns with broader semiconductor sector jitters. Western Digital (WDC), a key peer, fell 4.49% on the same day, reflecting sector-wide caution amid concerns over NAND pricing cycles and AI demand sustainability. While Sandisk’s AI-focused NAND production differentiates it from WDC’s HDD-centric strategy, both stocks face pressure from macroeconomic uncertainties and inventory adjustments in the memory market. The sector’s mixed performance underscores the delicate balance between AI-driven growth and cyclical headwinds.

Options Playbook: High-Leverage Puts and Calls for Short-Term Volatility
• 200-day average: 55.65 (below current price)
• RSI: 70.88 (overbought)
• MACD: 15.86 (bullish divergence)
• Bollinger Bands: 132.75 (upper), 100.63 (middle), 68.52 (lower)

Technical indicators suggest a volatile short-term outlook. The stock is trading near its 52-week high of $137.05 but faces resistance at the upper Bollinger Band. Traders should monitor the 120.31 support level and the 115.7 intraday low for potential reversal cues. Given the elevated RSI and bearish engulfing pattern, a short-term bearish bias is warranted, though the long-term AI narrative remains intact.

Top Options Contracts:
1. SNDK20251017P115 (Put):
- Strike: $115
- IV: 100.62% (high volatility)
- Delta: -0.3399 (moderate sensitivity)
- Theta: -0.1765 (moderate time decay)
- Gamma: 0.01725 (responsive to price swings)
- Turnover: 122,771 (high liquidity)
- Leverage: 22.94% (moderate leverage)
- Payoff at 5% Downside: $5.31 (max profit if price drops to $114.3).
- Why: High IV and gamma make this put ideal for capitalizing on a pullback.

2. SNDK20251017C115 (Call):
- Strike: $115
- IV: 51.42% (moderate volatility)
- Delta: 0.7521 (high sensitivity)
- Theta: -0.4716 (rapid time decay)
- Gamma: 0.02915 (high responsiveness)
- Turnover: 15,671 (solid liquidity)
- Leverage: 14.49% (moderate leverage)
- Payoff at 5% Downside: $0 (no profit if price drops).
- Why: Aggressive bulls may use this call for a rebound trade, but theta decay requires rapid price action.

Action: Aggressive short-term traders should prioritize the SNDK20251017P115 put for downside protection, while cautious bulls may test the SNDK20251017C115 call if the stock breaks above $120.31.

Backtest Sandisk Stock Performance
I ran into a technical issue when trying to generate the list of “-0.7 % intraday-plunge” dates directly from the raw price file. The back-end service that converts the price data into an event-date list returned an unexpected error (“code_result not found”).Next best steps:1. Retry the event-date extraction. • I’ll re-submit the price file with the same rule (Low ≤ Open × 0.993) and see if the service stabilises. 2. If the service is still unstable, I can: • Download the OHLC data locally, compute the dates myself, and feed them to the event-backtest engine manually, or • Adjust the trigger condition (e.g., a larger plunge threshold) if the current 0.7 % rule is too sensitive and generates an excessive number of signals.Let me know which path you prefer (simply retry, switch to a manual approach, or modify the threshold), and I’ll proceed accordingly.

Act Now: Position for Earnings Volatility or Sector Rotation
Sandisk’s near-term volatility hinges on its Q1 earnings report and the ramp-up of Fab2 production. While the AI-driven narrative remains compelling, the stock’s overbought RSI and bearish engulfing pattern signal caution. Investors should watch for a breakdown below $115.7 or a rebound above $125.2 to confirm direction. Meanwhile, Western Digital’s 4.49% drop highlights sector-wide risks. For now, prioritize the SNDK20251017P115 put to hedge against earnings-related selloffs. If the stock stabilizes above $120.31, consider a small long position for a potential bounce.