Just one day after Morgan Stanley helped boost Sandisk (SNDK 0.93%) stock nearly 7% in a day, shares of the memory specialist are giving back some gains on Thursday -- falling 1.7% through 11 a.m. ET.
You can blame Broadcom (AVGO 11.94%) for that.
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How Broadcom Q2 earnings sank Sandisk
It's a shame, really. As recently as yesterday, Morgan Stanley was telling investors "there's no quick fix to the memory shortage," that DRAM prices soared 40% in Q2, and are set for another 15% rise in Q3. This would be good news for Sandisk, which, while it doesn't make DRAM, does manufacture other forms of memory chips -- in particular, "high-bandwidth flash" memory that's also useful in AI data centers.
Recognizing this, MS boosted both its earnings estimates and its price target on Sandisk -- up 59% to $1,100 per share. But it was not to last.
Reporting earnings for its fiscal Q2 2026 last night, Broadcom beat expectations on both sales and earnings, reporting profit of $2.44 per share on $22.2 billion in sales. Management also beat forecasts for Q3 guidance, predicting sales of $29.4 billion versus Wall Street's forecast of $28.5 billion.
This news sparked a 15% sell-off in Broadcom stock this morning.
NASDAQ: SNDK
Key Data Points
What's next for Sandisk?
Does this make sense? Maybe, a little. Some analysts have noted that Broadcom's guidance on AI chip sales, in particular, looked a little weak. Broadcom CEO Hock Tan said AI chip sales in Q3 might bring in $16 billion, whereas Wall Street wants $17.2 billion.
Still, Broadcom grew AI chip revenue 143% in Q2, and $16 billion in Q3 would work out to better than 200% growth -- not as much as analysts hoped, but still accelerating. To me, that still sounds like good news for Sandisk.
