The rollercoaster ride that is investing in Sandisk (SNDK +3.82%) stock took yet another turn on Friday, as shares of the computer memory maker plunged 8% in the first 10 minutes of trading.
You can blame OpenAI for that.
Image source: Getty Images.
Why not blame Micron?
Sure, part of the reason Sandisk is selling off today relates to Micron's (MU +3.55%) blockbuster Q3 earnings report, which also sent Sandisk stock flying 22% on Thursday. It makes sense that, after a big move like that, there'd be some profit-taking happening today.
The bigger news today, though, concerns OpenAI.
As The New York Times reports, worries over the sudden downturn in the price of SpaceX (SPCX 5.06%) shares post-IPO have OpenAI rethinking whether now's really the right time for it to IPO. OpenAI's financial advisors are telling CEO Sam Altman he has to make a choice: IPO in 2027 and potentially secure a $1 trillion valuation for OpenAI -- or IPO in 2026 and risk a lower valuation.
Again, reportedly, Altman is intent on ringing the trillion-dollar bell and now leans toward postponing the OpenAI IPO.
NASDAQ: SNDK
Key Data Points
What this means for Sandisk
So what does this have to do with Sandisk?
OpenAI just completed a pre-IPO funding round that valued it at $852 billion and raised $122 billion in cash. OpenAI's expected to spend this money renting computing capacity from hyperscalers, who in turn will spend heavily on computer chips and memory to outfit gigantic data centers to run OpenAI's artificial intelligence programs.
The same thing will happen when OpenAI raises perhaps even more cash at its IPO.
But if OpenAI delays its IPO to 2027, it might have to delay spending all that money. This postpones the windfall for hyperscalers, for chipmakers -- and for Sandisk, too.
That's why Sandisk stock is down today.
