SNDK at $895, have you been fooled by the earnings report?
Revenue surged 378%, EPS wildly exceeded expectations, gross margin 85% — the earnings report is explosively strong, yet the stock price fell from 2300 to 895, halving twice. Is this a “golden pit,” or the last escape opportunity before the AI storage bubble bursts?
First, look at the surface: earnings report is amazing, stock price dropped beyond recognition.
October 29 earnings: revenue $11 billion, up 378% year-over-year, +23% quarter-over-quarter. EPS $49.51, gross margin 85.1%. Data center revenue rose 61% quarter-over-quarter to $4.8 billion, becoming the growth engine. The company also gave Q2 guidance: revenue $12.2-12.6 billion, EPS $55-57.
With numbers like these, shouldn’t the stock price soar for any company?
But SNDK dropped from 2300 all the way down to 790, a decline of over 60%. The more explosive the earnings, the harder it fell.
First point: the market isn’t doubting the earnings report, it’s betting the NAND cycle has peaked.
SNDK is a pure NAND flash company, spun off from Western Digital in 2025. Its lifeline is the AI data center demand for high-performance SSDs.
The earnings prove demand is currently booming. But what is the market betting on? It’s betting that next year or the year after, NAND supply might exceed demand and prices could collapse.
This is the semiconductor fate: the best performance periods are often the most dangerous for stock prices. Micron in 2021, Nvidia in 2022, all followed this script.
But this time there’s a key variable many miss — long-term contracts (NBM) have locked about 50% of 2027 capacity and about two-thirds of 2028 capacity, with cash guarantees. This isn’t a pure spot market cycle bet; it’s locking in revenue for the next few years in advance.
The market is betting on the cycle, the company is locking revenue. Who do you trust?
Second point: the 8-for-1 stock split is not good news, it’s a signal.
On November 19, SNDK will do an 8-for-1 stock split.
Many first think: “Stock split = good news, better liquidity, retail investors can buy.”
Wake up. A stock split doesn’t change any fundamentals. It changes the psychological threshold — $900 per share feels expensive, $112 per share after the split feels “cheap.”
Why split now? Because management knows the stock price will remain volatile, they want to lower the threshold, increase liquidity, and facilitate employee stock ownership. They expect future volatility to remain high and are preemptively opening the door wider.
Volatility will increase before and after the split. It’s both an opportunity and a meat grinder.
Third point: technicals tell you the rebound is real, but the trend hasn’t reversed.
Long-term cycle: from the June high of 2300+ down to 790, a drop of over 60%, a classic downtrend structure — lower highs, lower lows.
Mid-short term: rebounded from the demand zone near 800, broke through some short-term moving averages, touched a 24-hour high of 905. The 895 level is right in the middle of the rebound.
Resistance above: 900-950 (previous structure + dense moving averages), then 1000-1100
Support below: 800-820 (demand zone), breaking below could test lower levels
RSI recovered from oversold but hasn’t reached strong territory. Volume expansion is healthy. But note: overall still bearish structure, rebound needs confirmation of “higher lows + volume breakout above 950” to be a true reversal.
Short-term is recovering, mid-term hasn’t turned. Don’t mistake a rebound for a reversal.
Bull vs. bear, you decide:
On the bullish side:
Earnings explode: revenue +378%, EPS far exceeds expectations, gross margin 85%
Data center revenue +61% quarter-over-quarter, AI demand truly booming
Long-term contracts lock 50% of 2027 and two-thirds of 2028 capacity
Forward P/E low (some analysts point to 3-7x), valuation cheap
Buybacks + stock split, strong capital return intention
On the bearish side:
Dropped from 2300 to 895, mid-term trend still bearish
Market worries NAND cycle peaked, pricing tailwinds weakening
AI/semiconductor sector overall sell-off, fragile sentiment
Perpetual funding rates slightly positive, long leverage heavy, risk of squeeze
Volatility increases before and after split, liquidity risk
Key levels:
Resistance above: 900-950 (bulls’ lifeline) → 1000-1100
Support below: 800-820 (demand zone) → 750-780
Trading strategy:
Short-term traders:
Light long positions on pullback to 880-890, stop loss below 870, target 920-950. If volume breaks above 950, look higher. If resistance at 905-920 is weak, short to retest 880-850, stop loss above 930. Keep leverage within 5-10x, position size small.
Mid-term players:
Hold 800-820 and form higher lows, scale in longs, target 1000+, strict stop loss 750-780. If breaks 800 with volume, turn bearish or wait.
Long-term believers:
AI storage demand is real, long-term contracts locking revenue is real, valuation cheap is real. Wait for liquidity to stabilize and trend confirmation after the split before considering long-term holding.
SNDK now looks like Micron in 2022 —
Best earnings, worst stock price drop. Everyone said “cycle peaked,” but then AI came and demand exploded again.
$BTC$ETH$ZEC
Disclaimer: OKX Orbit content is provided for informational purposes only. Learn more
