Why Sandisk Stock Keeps Crashing

SanDisk shares have collapsed 31% over three trading sessions as two catalysts converge. Chinese chipmaker CXMT's $487 billion IPO—raising $8 billion in fresh capital—poses a direct threat to memory-chip pricing power, while broader concerns about potential cuts to AI infrastructure spending add demand-side pressure.

The CXMT offering injects significant capacity into an already competitive memory market. SanDisk's historically high profit margins face compression risk if the Chinese manufacturer pursues aggressive pricing to gain share. Memory chips remain commoditized, and new supply typically forces incumbents to cut prices or cede volume.

Simultaneously, investor anxiety around AI capex is spilling into memory-chip demand forecasts. Data-center builds have driven recent growth in high-margin memory products, and any pullback in infrastructure spending would hit SanDisk's most profitable segment.

The stock's 31% three-day drop reflects both immediate competitive pressure from a well-capitalized new entrant and uncertainty about end-market demand from AI buyers. The combination leaves SanDisk navigating margin pressure from below and volume risk from above.