Sandisk's and Micron's stocks sink as the rotation trade builds, but supply shortages should limit losses

SanDisk shares were down Wednesday as investors rotated out of the chip sector after a strong first-half run. However, an analyst argued NAND supply shortages are expected to persist through next year, implying continued pricing support and more upside for the stock. Net takeaway: short-term weakness, but fundamentals may still favor upside if the supply-constrained backdrop holds.

Analysis

SanDisk shares were down Wednesday as investors rotated out of the chip sector after a strong first-half run. However, an analyst argued NAND supply shortages are expected to persist through next year, implying continued pricing support and more upside for the stock. Net takeaway: short-term weakness, but fundamentals may still favor upside if the supply-constrained backdrop holds.