Right now, guidance and positioning price memory, not trailing earnings. When a $14 billion buyback and quadrupled profit cannot support SanDisk, the market is signalling that yesterday's numbers have almost no scarcity value.
The next move depends on three things: NAND/DRAM contract pricing, evidence that AI-related demand can absorb new supply, and how much leveraged positioning remains to unwind. SanDisk's cautious guidance has shifted the debate from "how strong was the supercycle?" to "where are peak earnings?"
That makes buybacks useful as downside support, but not a catalyst. Western Digital's -13% despite 44% revenue growth reinforces the same message.
I would not call the cycle broken yet, but neither would I aggressively catch this fall. Memory is being priced on the next two quarters now. Stabilising prices plus stronger guidance could trigger a violent rebound, especially after leverage clears. Until then, good earnings can remain bad stocks.
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- BelindaHaywood·08-07 17:33I added more SanDisk and Western Digital here. If NAND pricing firms even a bit, this snapback could get violentLikeReport