Chip Stocks Decline Amid Inflation Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 12 2026
0mins
Source: Newsfilter
- Chip Stock Pullback: Chip stocks experienced a significant decline on Tuesday as investors shifted to a risk-off stance following a hotter-than-expected inflation report, with Qualcomm plummeting 13% and Intel dropping 8%, indicating growing concerns about future growth prospects.
- AI Leadership Shift: While Nvidia remains a dominant player in the AI sector, investor confidence has shifted towards CPU and memory chip manufacturers, who are expected to benefit from the rise of AI agents, thus driving demand for their stocks.
- Price Increase Trend: Memory chip makers are raising prices amid an ongoing supply shortage, with Micron and SanDisk falling 6% and 8% respectively; however, SanDisk's stock has surged over sixfold since the beginning of the year, reflecting market recognition of its long-term growth potential.
- Market Sentiment Shift: The rise in oil prices due to the war in Iran has heightened investor sensitivity to risk, leading to a pullback in chip stocks after a substantial rally, which underscores the uncertainty surrounding the economic outlook.
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Analyst Views on SNDK
Wall Street analysts forecast SNDK stock price to fall
14 Analyst Rating
11 Buy
3 Hold
0 Sell
Strong Buy
Current: 1641.640
Low
220.00
Averages
283.69
High
410.00
Current: 1641.640
Low
220.00
Averages
283.69
High
410.00
About SNDK
SanDisk Corporation is a developer, manufacturer and provider of data storage devices and solutions based on NAND flash technology and has consumer brands and franchises globally. The Company's solutions include a range of solid state drives (SSDs) embedded products, removable cards, universal serial bus (USB) drives, and wafers and components. Its broad portfolio of technology and products addresses multiple end markets of Datacenter, Edge and Consumer. Its Datacenter end market is composed primarily of products for public or private cloud environments and enterprise customers. The Company, through the Edge end market, provides original equipment manufacturer and channel customers a broad array of high-performance flash solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces. The Company serves the Consumer end market with a broad range of retail and other end-user products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Market Demand: Sandisk has sold out all NAND flash products for 2026 and is generating strong pre-orders for 2027 production, demonstrating its substantial benefits from the AI wave and expected continued growth in the coming years.
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- Emerging Growth Drivers: Rakesh highlighted
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See More
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- Outstanding Investment Performance: As Chief Investment Officer at Atreides Management, Baker oversees approximately $7 billion in investments and achieved over 19% compound annual returns while managing the OTC Portfolio at Fidelity, outperforming 99% of his peers, showcasing his exceptional prowess in tech investing.
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See More
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See More
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- Stock Surge: Sandisk has seen its stock price rise approximately 4,200% over the past year, with its market cap surpassing $240 billion, indicating a strong growth potential that could lead to a $1 trillion valuation within the next five years.
- Significant Revenue Growth: In Q3 of fiscal 2026, Sandisk's revenue increased by 97% sequentially to $5.95 billion, far exceeding the $1.7 billion from the previous year, highlighting the company's substantial benefits from the AI wave and optimistic future growth outlook.
- Profit Margin Improvement: The company's net profit margin exceeded 60% in the most recent quarter, a significant increase from 26.6% in the prior quarter and just 4.9% in the quarter before that, demonstrating a strong improvement in profitability.
- Strong Market Demand: With the proliferation of AI technology, Nvidia anticipates over $1 trillion in data center revenue for 2026 and 2027, driving demand for memory chips; Sandisk has already sold out its NAND flash drives for 2026, indicating robust market demand for the coming years.
See More
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- Revenue Surge: Sandisk's revenue increased by 97% sequentially in Q3 of fiscal 2026, reaching $5.95 billion, significantly surpassing the $1.7 billion from the previous year, indicating robust demand and rapid growth potential in the memory market.
- Strong Market Demand: Sandisk has sold out all NAND flash products for 2026 and is generating strong pre-orders for 2027 production, demonstrating its substantial benefits from the AI wave and expected continued growth in the coming years.
- Profit Margin Surge: The company's net profit margin exceeded 60% in the most recent quarter, a significant increase from 26.6% in the previous quarter and just 4.9% earlier, showcasing improvements in cost control and pricing power.
- Optimistic Industry Outlook: Melius Research forecasts that memory demand will remain strong throughout this decade, and with Nvidia's expectations for data center revenue, Sandisk is well-positioned to achieve a $1 trillion market cap within five years.
See More
Mizuho Raises SanDisk Price Target to $1,825 Amid Strong Earnings Revisions
- Price Target Increase: Mizuho analyst Vijay Rakesh raised SanDisk's price target from $1,625 to $1,825, implying approximately 12% upside from the stock price at the time, reflecting a positive outlook on the company's future earnings power.
- Revenue and EPS Forecasts: Rakesh increased SanDisk's FY2027 revenue estimate to $45.3 billion from $42.3 billion, surpassing Wall Street's consensus of $43.6 billion, indicating strong growth potential over the next two years.
- NAND Market Outlook: Mizuho expects NAND tightness to persist into 2027, with non-AI customers undersupplied by 30% to 50%, suggesting robust structural demand that could drive long-term growth for SanDisk.
- Emerging Growth Drivers: Rakesh highlighted
See More
Gavin Baker's Insights on AI Stock Valuations
- Outstanding Returns: Gavin Baker achieved a compound annual return rate exceeding 19% while managing the OTC portfolio at Fidelity, outperforming 99% of his peers, showcasing his exceptional investment acumen and market insight.
- Large Portfolio Management: At Atreides Management, Baker oversees approximately $7 billion in public and private investments, and although his complete returns are not disclosed, his Sharpe ratio of 2.46 significantly exceeds the industry average, indicating high returns with controlled risk.
- AI Sector Valuation Analysis: On the All-In podcast, Baker highlighted the 'cross-sectionally inefficient' valuations in the AI sector, noting that memory stocks like Micron and Sandisk are currently undervalued, while Nvidia's low P/E suggests potential for price appreciation.
- Investment Strategy Recommendation: Baker advises investors to favor cheaper stocks like Micron and Nvidia over high-valuation stocks like Lumentum, which rely on multiple expansions for growth, suggesting that in the event of overall AI sector fluctuations, the cheaper stocks are likely to outperform in the long run.
See More
Gavin Baker Highlights Valuation Inefficiencies in AI Stocks
- AI Stock Valuation Analysis: Fund manager Gavin Baker identified a 'cross-sectional inefficiency' in AI stocks, suggesting that both cheap and expensive stocks cannot accurately reflect their true value, potentially exposing investors to volatility risks within the same cycle.
- Outstanding Investment Performance: As Chief Investment Officer at Atreides Management, Baker oversees approximately $7 billion in investments and achieved over 19% compound annual returns while managing the OTC Portfolio at Fidelity, outperforming 99% of his peers, showcasing his exceptional prowess in tech investing.
- Market Cyclicality Risks: Baker emphasized that memory chip stocks like Micron and Nvidia may perform better in the current AI cycle, while optical stocks like Lumentum, which rely on multiple expansions, could face greater downside risks, necessitating cautious evaluation by investors.
- Investment Strategy Recommendation: Baker advises investors to opt for cheaper stocks like Micron and Nvidia within the AI sector, steering clear of high-valuation stocks that depend on multiple expansions, aiming for better long-term returns throughout the AI industry's cyclical nature.
See More
US Stock Indices Reach All-Time Highs Amid Positive Economic Signals
- Strong Market Performance: The S&P 500 rose by 0.22%, the Dow Jones Industrial Average increased by 0.72%, and the Nasdaq 100 climbed by 0.36%, with all three indices reaching new all-time highs, reflecting market confidence in economic recovery.
- Tech Stocks Lead Gains: Dell Technologies surged 32% after reporting Q1 total revenue of $43.84 billion, significantly exceeding the consensus estimate of $35.52 billion, and raised its 2027 revenue forecast to between $165 billion and $169 billion, indicating strong market demand and growth potential.
- Positive Economic Data: The May Chicago PMI rose by 13.5 to 62.7, far surpassing expectations of 50.3, marking the fastest expansion pace in 4.25 years, which further bolstered market confidence in stocks.
- Oil Price Decline Benefits Stocks: Crude oil prices fell over 1% to a five-week low due to a preliminary agreement between the US and Iran, easing inflation concerns and supporting the upward trend in the stock market.
See More
