SanDisk shares turn most oversold in 15 months after 57% plunge

SanDisk Corp. shares fell 57% to $1,015.89 by the July 29 close, the stock's most oversold level in 15 months after a historic rally reversed. The relative strength index dropped below 33, the lowest reading since early March 2025, after the memory maker's year-long surge to $2,354.39 collapsed in just over a month.

"SanDisk remains a 'Strong Buy' with an average 12-month price target of $2,052.50, implying 102% upside from current levels," according to TipRanks data compiled July 30. Four of six analyst notes issued since July 1 carried positive ratings, and none recommended selling the stock.

The RSI had exceeded 99 in mid-June — the most overbought reading in the stock's history — before the selloff began in late June. The swing from extreme overbought to extreme oversold in roughly six weeks reflects the violent repositioning in a stock that still trades 2,670% above its spinoff price from Western Digital Corp. The rapid decline suggests forced selling from momentum-driven funds that had piled into the name during its year-long ascent.

The broader AI sector, which drove SanDisk's surge, faces growing skepticism over the return on massive capital spending. Microsoft Corp.'s latest quarterly results were welcomed by shareholders, but Meta Platforms Inc.'s earnings raised fresh doubts about AI-related profitability. South Korea's KOSPI index, a bellwether for memory chip demand, has dropped nearly 40% since late June, compounding headwinds for semiconductor names that had benefited from the AI infrastructure buildout.

For SanDisk, the oversold RSI reading has historically preceded recoveries. A similar drop below 33 in early March 2025 preceded the rally that eventually pushed the stock 7,000% higher. Whether history repeats depends on whether the AI spending cycle regains investor confidence and whether broader market volatility in Asia stabilizes. The next catalyst for the stock could come from upcoming earnings reports from major AI infrastructure buyers and any shifts in NAND flash memory pricing trends, which remain a key driver of SanDisk's revenue.

This article is for informational purposes only and does not constitute investment advice.