Why Sandisk Stock Is Still Dropping
2026-07-16 15:24
•Rich Smith •The Motley Fool
••••• •• Axe Capital view
Sandisk’s Dip Masks a Near-Term Opportunity
TSMC’s ramp-up in AI chip production should boost demand for Sandisk’s memory chips despite the recent stock drop.
Sandisk’s 9.6% slide after TSMC’s earnings and increased capital expenditure looks like a knee-jerk reaction. TSMC’s $60 billion capex—higher than forecast—is fueling AI chip production, which in turn drives demand for Sandisk’s NAND flash memory. For South African investors, this is a slice of the broader tech upgrade theme, which usually pushes the USD/ZAR weaker as global risk appetite ticks up. Locally, a softer rand often benefits exporters like AngloGold Ashanti and MTN but can pressure importers like Woolworths. Sandisk’s fundamentals remain strong amid this AI-led demand surge, but the stock’s volatility warns against a rush in. There’s a decent knock-on effect on the rand, but not enough to swing JSE tech giants directly. If the AI hype slows or chip demand disappoints, Sandisk and the broader semiconductor supply chain could stumble,. this is just my opinion and not financial advice
I’d watch Sandisk for a buying opportunity near current levels, especially if AI demand stays firm. Meanwhile, keep USD/ZAR on the radar for shifts in global risk sentiment.
- SNDK
- USD/ZAR
- AI demand slows unexpectedly
- chip capacity outpaces market growth
6/10
Sandisk stock fell 9.6% following TSMC's Q2 earnings beat and announcement of increased capital spending ($60B vs. $54B forecast). While investors punished TSMC for higher spending concerns, the article argues this is actually positive for Sandisk, as TSMC's expanded chip production for AI applications will increase demand for Sandisk's NAND flash memory chips needed to pair with CPUs and GPUs.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Rich Smith
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: SNDK, TSM
Sentiment: Positive - Despite today's stock decline, the article argues Sandisk's fundamentals remain strong. Increased TSMC investment in AI chip production will drive demand for Sandisk's NAND memory chips, supporting profit growth in the near term. TSMC beat earnings expectations with 77% profit growth, but announced higher capital spending ($60B vs. $54B), causing a 2.2% sell-off. The article suggests this spending is justified by strong AI demand and shouldn't be viewed negatively.
Keywords: semiconductor memory, NAND flash memory, AI chips, capital investment, chip production, profit margins
Insights:
- SNDK: Positive: Despite today's stock decline, the article argues Sandisk's fundamentals remain strong. Increased TSMC investment in AI chip production will drive demand for Sandisk's NAND memory chips, supporting profit growth in the near term.
- TSM: Neutral: TSMC beat earnings expectations with 77% profit growth, but announced higher capital spending ($60B vs. $54B), causing a 2.2% sell-off. The article suggests this spending is justified by strong AI demand and shouldn't be viewed negatively.