Why Sandisk Stock Tumbled 47% in July

SanDisk stock plunged 47% in July as memory and AI infrastructure names sold off sharply. The decline came as multiple headwinds converged: investor worry over hyperscaler capital-expenditure levels, the launch of a new AI model in China, competitive pressure from emerging Chinese memory chip makers, and an earnings miss at SK Hynix.

The July rout reflects broader jitters about overcapacity and demand sustainability in the memory sector. Hyperscalers—cloud giants that purchase data-center components in bulk—have ramped spending aggressively, raising questions about future order momentum. Meanwhile, China's advances in both AI development and domestic semiconductor production are shifting competitive dynamics for established players like SanDisk.

Despite the sharp drop, analysts maintain that SanDisk's profit trajectory remains positive through next year, suggesting the sell-off may have overshot near-term fundamentals.