Why Sandisk Stock Skyrocketed 54.6% Last Month But Is Sinking in June
Written by Keith Noonan for The Motley Fool -> Sandisk published a blockbuster quarterly report at the end of April. May saw very strong bullish momentum for AI chip stocks. Valuations in the semiconductor space have taken a step back in June. Sandisk (NASDAQ: SNDK) stock sur
Sandisk published a blockbuster quarterly report at the end of April.
Valuations in the semiconductor space have taken a step back in June.
Sandisk (NASDAQ: SNDK) stock surged higher in May's trading. The memory technologies company's share price gained 54.6% across the stretch. Meanwhile, the S&P 500 gained 5.2%, and the Nasdaq Composite rose 8.4%.
On April 30, Sandisk published results for the third quarter of its current fiscal year -- a period that ended April 2. The strong results gave the go ahead for strong bullish momentum in a month that saw very bullish trading for artificial intelligence (AI) chip stocks.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Sandisk released its fiscal Q3 report at the end of April, and performance in the period crushed the market's expectations. The company recorded non-GAAP (adjusted) earnings of $23.41 per share on sales of $5.95 billion. For comparison, the average analyst estimate had targeted adjusted earnings of $14.66 on sales of $4.7 billion.
With sales roaring 251% higher year over year and margins looking very strong amid a very favorable demand environment, Sandisk's fiscal Q3 report delivered blockbuster print. The very strong report set the backdrop for the company to receive many price target increases from analysts last month, and the overall trading environment for AI chip stocks was also very favorable. Valuations for semiconductor stocks surged last month, and Sandisk's strong Q3 results and formidable position in the memory tech space helped it attract a lot of bullish interest from traders.
Bullish momentum for the AI trade has been taking a breather early in June. For starters, the market had a negative reaction to Broadcom's quarterly report and forward guidance even though the performance picture and outlook appeared to be pretty strong. Bearish pressures were then intensified by the publication of the May jobs report from the Bureau of Labor Statistics (BLS). Sandisk stock is down 8% in June's trading as of this writing.
