Why Sandisk Stock Just Dropped

SNDK dropped 4% Monday despite Jefferies doubling its price target to $3,000 on Friday. The selloff was sparked by reports that Apple is seeking approval to purchase memory chips from Chinese supplier CXMT, potentially shifting orders away from Micron and Sandisk.

The Apple catalyst overshadowed Jefferies' bullish call. While CXMT primarily manufactures DRAM rather than the NAND flash memory that constitutes Sandisk's core business, the market interpreted the news as a broader competitive threat from Chinese chipmakers gaining ground with major customers.

Analysts pushed back on the panic, pointing to structural supply constraints. Memory chip deficits are projected to persist through 2027-2028, a timeline that favors established suppliers like Sandisk as customers lock in long-term supply agreements. The competitive threat from Chinese manufacturers may be overstated given these supply dynamics and the technical differences between DRAM and NAND products.

The 4% decline stands in sharp contrast to Jefferies' price target increase, creating a disconnect between analyst outlook and near-term market reaction.