Analysts Urge Selling SanDisk Before Artificial Intelligence Profit Margins Collapse
San Jose, Friday, 12 June 2026.
Despite a staggering 4,410% annual stock return fueled by artificial intelligence demand, analysts warn investors to sell SanDisk before an inevitable collapse in vulnerable memory market profit margins.
The AI Illusion and Unsustainable Margins
Since its separation from Western Digital in February 2025, SanDisk (NASDAQ: SNDK) has evolved into a pure-play NAND flash enterprise, perfectly positioned to capitalize on the artificial intelligence infrastructure boom [6][8]. As global cloud service providers pour capital into AI data centers throughout 2026, demand for high-capacity enterprise solid-state drives (SSDs) has surged exponentially [5][8]. This insatiable appetite propelled SanDisk’s stock to $1,758 on June 1, 2026, representing a year-to-date increase of 643% and an extraordinary year-over-year gain of 4,560% [3]. The company’s valuation has subsequently ballooned to $278 billion, supported by fiscal third-quarter 2026 revenues of $5.95 billion—an increase of 251% from the previous year—and a remarkable gross margin of 78% [1][3].
However, financial analysts are now aggressively flagging these metrics as a cyclical peak disguised as sustainable growth [1][8]. Market analysis warns that SanDisk’s 78.4% gross margin is fundamentally unsustainable due to an impending cost-curve inversion associated with its BiCS10 technology and the company’s heavy reliance on the spot market [1]. Dave Sek