SanDisk Earnings Eve: Short Sellers Step Back as Stock Bounces

SNDK enters its October 29 earnings print with short sellers covering rather than pressing, even as the stock has fallen 27% in a month.

Short interest declined to 3.35% of the free float as of October 27, its lowest level in at least a year. In absolute terms, roughly 4.9 million shares are short, down from nearly 5.9 million a month ago, a reduction of about 10% over 30 days. The week just passed did see a small rebuild of around 2.4%, snapping a longer covering trend, but the direction of travel over the past six weeks has been unmistakably one way: shorts leaving, not adding. The borrow market confirms that picture. Availability runs at 4,296%, meaning more than 42 shares remain loanable for every one currently borrowed. Cost to borrow edged up sharply on a week-over-week basis, tripling from very low levels, but the absolute rate of 0.39% remains negligible. There is no friction, no squeeze pressure, and no sign the lending market is being stressed by new demand for borrows.

Options positioning has shifted slightly less defensive than it was a month ago, though it still leans toward caution. The put/call ratio is running at 1.18, just below its 20-day average of 1.20, and about half a standard deviation below that mean. That is not a dramatic hedge signal in either direction, but the ratio has been elevated persistently throughout October, never dropping close to the 52-week low of 0.72. The stock rebounded 3.9% on Tuesday to close at $1,304.84, but remains down 4.4% on the week, a steeper drop than the roughly flat performance from closest peers STX (down 1.1% on the week) and WDC (up 4.5%), which adds to the sense that sector dynamics alone do not fully explain the month-long slide.

The Street is constructive but has begun trimming its ambitions. Cantor Fitzgerald's C.J. Muse cut his target from $2,900 to $2,200 on October 26, maintaining his Overweight rating, a notable move the day before the print. The consensus mean target is $2,144 against a current price just above $1,300, implying roughly 64% upside. Mizuho raised its target to $2,050 in early October. Rosenblatt launched coverage at Buy with a $2,400 target in late September. JPMorgan reinstated at Overweight with a $2,250 target after the August print. The bulls anchor on the datacenter revenue story: $5.15 billion in fiscal 2026, up 437% year on year, with eight large customers locked into New Business Model agreements covering roughly 65% of fiscal 2028 production and $93.9 billion of minimum contracted revenue. The bears point to NAND oversupply, edge markets still representing around 60% of 2025 sales, and the Kioxia joint-venture structure that leaves SanDisk carrying about half of fixed manufacturing costs regardless of demand. Valuation sits at a trailing P/E of roughly 5.1 and EV/EBITDA near 4.2, both compressed relative to where they were a month ago.

The earnings history adds another layer of context: the last four prints produced violent moves. The two most recent events in August 2026 generated day-one moves of plus 17% and plus 22% respectively on one set of dates, and minus 12% on another. The five-day drift after those prints ranged from minus 6% to plus 19%. That range of outcomes, across four events that all mapped roughly to the same quarter, underscores how sensitive the stock is to the precise tone of management guidance rather than the headline numbers.

BlackRock filed an updated Schedule 13G/A on October 27, disclosing a stake of 7.7% of shares, up from 6.0% previously. That is the most recent institutional signal in the data and points to at least one large passive holder adding into the selloff. Positions are as last disclosed and stakes around the 5% threshold can change without a further filing.

The October 29 print is the first meaningful test of whether the datacenter revenue mix and contracted customer agreements are insulating the business from the NAND pricing cycle, or whether the past month's selloff was correctly anticipating softer guidance on the edge and enterprise SSD side.