SanDisk stock down 33% from YTD high: Experts predict upside before Aug. 13

SanDisk stock price has slumped into a bear market after falling by 33% from its highest point this year. It dropped to $1,610, mirroring the performance of other memory and semiconductor companies. Still, despite this retreat, analysts are highly optimistic about the company ahead of its earnings release on August 13.

Top analysts are bullish on SanDisk stock

Aaron Rakers, a Wells Fargo analyst, boosted his target for SanDisk shares from $1,250 to $1,620 this week. He joined other analysts who have either boosted their targets or maintained.

EverCore ISI set a price target of $3,100, representing a big jump from the current level. Matt Bryson, a Wedbush analyst, hiked his target for the stock from $1,200 to $2,000, while Wamsi Mohan, a Bank of America analyst, hiked the target to $2,500.

Other analysts who boosted their targets recently were from companies like Bernstein, Citigroup, and Cantor Fitzgerald. 

The general view among these analysts is that the artificial intelligence boom is still going on and there is no need for investors to panic. 

To a large extent, recent earnings by some of the biggest companies shows that their revenue and earnings growth is surging. For example, Intel stock is soaring today after the semiconductor company published strong results. 

Micron, the third-biggest player in the high-bandwidth memory (HBM) industry showed that its revenue jumped by over 300%. In another note, Samsung Electronics also released strong numbers.

Most notably, big-tech companies are still committed to their spending. For example, Alphabet predicts that it will spend over $205 billion this year. More big-tech companies may continue this spending when they release their numbers next week.

Most importantly, SanDisk has entered several long-term supply agreements with its biggest customers. This approach is aimed at helping to reduce the boom and bust cycles that have been associated with the memory industry. 

Three of these deals are worth at least $42 billion, with the contracts ranging between 1 and five years. Notably, these contracts include floors and ceilings, limiting downside and upside volatility.

SanDisk earnings are coming up

The next important catalyst for the SNDK stock price will be its August 8 earnings, which will provide details of its performance. 

These earnings are expected to show that the company had the best quarter ever, with its revenue coming in at $8.40 billion, up by 349%. This is a big milestone for a company that made $7.3 billion in the last financial year. 

If this view is correct, then its annual revenue will be $19.8 billion, up by 170% from the same period last year. Its annual revenue in the next financial year will be $50.3 billion. Judging by the recent tech earnings, chances are that it will publish stronger results than expected.

A key risk facing SanDisk is that big tech companies may start reducing their spending in the coming months or years. If this happens, demand will likely wane, affecting memory companies. 

READ MORE: Micron stock gets an unexpected clue from China’s latest AI experiment

SNDK stock technical analysis

SanDisk stock chart | Source: TradingView

SanDisk is also facing some technical risks. It has slipped below the 50-day Exponential Moving Average (EMA) and the 23.6% Fibonacci Retracement level.

The stock has also formed what looks like a head-and-shoulders pattern, a common bearish sign. There are also signs that the stock is moving from the markup phase of the Wyckoff Theory into the distribution stage.

Therefore, the stock will likely resume the downtrend, potentially to the psychological level of $1,000.