Sandisk (SNDK) Plunges 3.8% on Intraday Volatility Amid AI Manufacturing Hype – What’s Next?

Summary
• Sandisk (SNDK) trades at $123.54, down 3.79% from its $128.41 previous close
• New 218-layer 3D NAND Fab2 with Kioxia operational in Japan
• Analysts remain bullish despite short-term volatility, with $112–$125 price targets

Sandisk’s intraday plunge reflects a mix of profit-taking and lingering sector risks. The stock opened at $132.05 but fell to a low of $119.29 before rebounding. The launch of its advanced Fab2 facility with Kioxia has bolstered long-term optimism, yet near-term challenges like memory price swings and $60M in 2026 fab costs weigh on sentiment. Traders are now scrutinizing technical levels and options activity for clues.

Profit-Taking and Sector Volatility Trigger Sharp Correction
Sandisk’s 3.79% intraday drop stems from a combination of profit-taking after a 215% year-to-date rally and renewed caution over memory market cyclicality. While the Fab2 launch with Kioxia strengthens its AI storage positioning, analysts warn of ongoing risks: $60M in 2026 fabrication costs and potential NAND price softness. The stock’s overbought RSI (79.41) and stretched valuation (2x sales) have prompted short-term sellers to lock in gains, exacerbating the pullback.

Semiconductor Sector Mixed as Micron Gains, Sandisk Slides
The semiconductor sector remains fragmented, with Micron Technology (MU) surging 2.08% on strong HBM demand. Sandisk’s decline contrasts with broader chipmaker resilience, as AI-driven NAND demand and tight supply continue to support pricing power. However, Sandisk’s exposure to cyclical memory pricing and its standalone operating history make it more volatile than peers like TSMC or Intel.

Options Playbook: Capitalizing on Volatility and Key Levels
• RSI: 79.41 (overbought)
• MACD: 16.07 (bullish), Signal: 14.20
• Bollinger Bands: Upper $131.36, Middle $98.10, Lower $64.83
• 200D MA: Empty (no long-term trend)

Technical indicators suggest overbought conditions, but the stock remains above its 30D MA ($82.98). Key support levels at $120 and $117 are critical for near-term direction. The options chain reveals two high-conviction plays:

• SNDK20251010P121 (Put, $121 strike, 10/10 expiry):
- IV: 107.81% (high volatility)
- Delta: -0.427 (moderate sensitivity)
- Theta: -0.131 (rapid time decay)
- Gamma: 0.0253 (responsive to price swings)
- Turnover: 512,024 (liquid)
- LVR: 23.39% (high leverage)
- Payoff at 5% downside ($117.36): $3.74 per contract
- Ideal for aggressive short-term bearish bets with high leverage and liquidity.

• SNDK20251010C124 (Call, $124 strike, 10/10 expiry):
- IV: 117.45% (elevated)
- Delta: 0.500 (balanced exposure)
- Theta: -1.129 (aggressive decay)
- Gamma: 0.0236 (price-sensitive)
- Turnover: 100,475 (active)
- LVR: 19.80% (moderate leverage)
- Payoff at 5% downside ($117.36): $0 (out-of-money)
- Suitable for bullish traders expecting a rebound above $124, leveraging high gamma for rapid directional moves.

Aggressive bulls may consider SNDK20251010C124 into a bounce above $124, while bears should eye SNDK20251010P121 for a breakdown below $120.

Backtest Sandisk Stock Performance
It appears that the ticker “SNDK” (SanDisk) stopped trading in May 2016 when SanDisk was acquired by Western Digital (ticker “WDC”). As a result, there is no market data for SNDK after 2016, so we cannot run a 2022-to-present back-test on that symbol.Please let me know how you’d like to proceed:1. Analyse Western Digital (WDC) instead, using the same “-4 % intraday plunge” event definition from 2022-present.2. Analyse historical SNDK data, but only for the years in which it was listed (prior to 2016).3. Use a different ticker of your choice.Just let me know which option (or another) you prefer, and I’ll set up the back-test accordingly.

Watch for $120 Support or AI-Driven Rebound – Act Now
Sandisk’s intraday plunge tests its $120 psychological support level, a critical inflection point for near-term sentiment. While the Fab2 launch and AI tailwinds remain intact, memory price volatility and 2026 costs pose risks. Traders should monitor the 52-week low ($27.89) and key resistance at $131.36. With Micron (MU) up 2.08%, sector momentum offers a potential catalyst for a rebound. Position now: SNDK20251010P121 for bearish bets or SNDK20251010C124 for a bullish breakout above $124.