**Sandisk Shares Plummet Amid Rising Competition**
Investors in Sandisk (NASDAQ: SNDK) are facing significant losses, as the stock has dropped over 31% since Thursday evening, including a 12.5% decline today. The primary concern stems from increasing competition in the NAND memory chip market, particularly following Chinese chipmaker CXMT’s recent IPO, which valued the company at $487 billion and raised more than $8 billion for expansion.
CXMT’s entrance into the memory chip landscape poses a threat to Sandisk’s profitability, especially given the company’s recent gross profit margins of over 78%. While CXMT is initially focused on DRAM chips, its potential expansion into NAND could further pressure Sandisk’s market share. Additionally, investors are wary about the sustainability of high prices in the AI economy, which may directly impact Sandisk’s revenue if infrastructure budgets are cut.
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