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SNDK enters its October 29 earnings print having given back 11% on the week, with short sellers continuing to reduce exposure even as the broader market punishes the stock harder than its peers.
The most notable shift since last week's note is the pace of short covering. Short interest has fallen to 3.4% of the free float, down from 3.7% a week ago and roughly half the 5.3% seen at the start of September. In absolute terms, roughly 5 million shares are now short, compared with nearly 7.8 million at the beginning of last month. That is a significant unwind in six weeks. The lending market gives shorts no reason to rush: availability is running at 4,376%, meaning there are more than 43 shares available to borrow for every one currently on loan, and the cost to borrow has slipped to 0.26%. The ORTEX short score has drifted down to 30.7, its lowest reading in the recent history shown, reinforcing that the short-side thesis is losing rather than gaining adherents. There is no squeeze tension here. The story is orderly covering into a falling stock.
Options positioning has eased off its recent defensive peak. The put/call ratio has pulled back to 1.20, now running slightly below its 20-day average of 1.24, and the z-score of minus 1.7 marks this as one of the least defensive options readings of the past month. That is a meaningful contrast with the tone in the equity market: the stock is down 11% on the week while options traders are, if anything, becoming marginally less cautious. Peers tell a similar story on price but not positioning. STX and WDC fell 7% and 7.4% respectively on the week, while Samsung shed nearly 15%. The broader storage complex is under pressure, and Sandisk is not escaping it.
The Street has not moved in response. The most recent analyst action came from Mizuho on October 6, where the firm raised its target to $2,050 from $1,875 while maintaining an Outperform rating. Before that, Rosenblatt initiated with a Buy and a $2,400 target in late September. With the stock now near $1,482, the consensus mean target of $2,173 implies roughly 47% upside from current levels, a gap that reflects the Street's conviction that the AI-driven NAND thesis remains intact. The bull case centres on SanDisk's vertical integration with Kioxia, $5.15 billion in datacenter revenue in FY26 versus $960 million in FY25, and $93.9 billion in minimum contracted revenue through its next-generation bit module customers. Bears point to structural NAND cyclicality, Chinese competition, and the roughly 60% of sales still tied to PC and smartphone demand. On valuation, the stock trades at a trailing PE of 5.8 and an EV/EBITDA of 4.8, both of which have compressed over the past 30 days as the stock has retreated. The 90-day EPS momentum factor score of 98 is the standout, suggesting the estimate revision cycle remains firmly positive even as the share price corrects.
One ownership detail worth noting: Western Digital, which held a 5.2% Schedule 13G position as recently as early 2026, had reduced that stake to 0.7% by May. The Vanguard Group similarly exited its 11.4% position entirely by March, replaced by Vanguard Capital Management's fresh 7.2% 13G filing in April. BlackRock has also trimmed from 10.9% to 6.0% over the same period. These are as-last-disclosed figures, and holders dropping below 5% may not file again, so the current ownership picture carries that caveat. What the 13D/G register does show is meaningful turnover at the top of the register since the spin-off, with passive giants adjusting their benchmark weights as the float dynamics settled.
With results due in 15 days, the key question is whether the datacenter revenue trajectory that drove the stock from its spin-off lows to a near 650% year-to-date peak at its high can hold against a storage market that is showing cyclical cracks across the peer group.
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