SanDisk (SNDK) stock plunged 22.26% to $806.43 on Thursday, November 5, on roughly 30 million shares. Volume topped triple the 20-day average as the memory chipmaker fell back to March 20 levels.
The crash hit a company that had just reported record results. SNDK now trades 66% below June’s $2,354 peak. Meanwhile, hedge funds keep unwinding the AI trade they built since 2025.
Why Did SanDisk Stock Crash After Record Earnings?
On October 29, SanDisk posted quarterly revenue of $11.03 billion, up 378% year over year. Data center sales climbed 61% from the prior quarter to $4.80 billion.
Management also guided next-quarter revenue to between $12.2 billion and $12.6 billion. On Thursday, investors looked past all of it.
The trigger came from Washington. Democrats won both chambers of Congress. Governor candidates opposed to fast data center growth also won in Texas, Georgia, and Ohio.
That matters because SanDisk’s enterprise solid-state drives (SSDs) sell directly into those data centers. Arizona Rep. Yassamin Ansari added pressure by calling for a pause on advanced AI development on X.
Meanwhile, the Philadelphia Semiconductor Index (SOX) fell about 12.3%, its worst session since March 2020, TradingKey data shows. The Nasdaq slid into Nasdaq correction territory after a 5.5% drop.
Is a Hedge Fund Blowup Next?
Some traders see Thursday’s rout as a warning for leveraged funds. X user jarzoombek argued that fund collapses may only be a matter of time.
His theory targets funds that rode AI winners for two years while shorting traditional firms expected to lose out to AI. No public data has confirmed that specific positioning.
However, positioning data supports the broader concern. In October, Hedgeweek cited Goldman Sachs prime brokerage data on hedge fund selling. Funds erased every net AI stock purchase since early 2025 within five sessions.
Morgan Stanley data shows funds also cut overall exposure by about 7.8%. That was the largest reduction since the series began in 2016. BeInCrypto tracked how hedge funds dumped AI stocks through that stretch.
Memory names took the heaviest damage. Samsung, SK Hynix, Micron, and SanDisk shed more than $700 billion in combined market value in under two weeks.
The risk also has a precedent. In July, margin calls shrank Leopold Aschenbrenner’s Situational Awareness fund from over $45 billion to about $10 billion. Two months later, the fund bought SanDisk call options again.
In contrast, Bitcoin (BTC) fell about 6.5% during Bitcoin’s 48-hour reversal, from above $80,800 to near $75,500. That loss was less than one-third of SNDK’s, a result jarzoombek called good for BTC.
Can SanDisk Stock Find a Floor Below $942?
On the daily chart, SNDK has dropped nearly 58% since its September 22 swing high near $1,909.
Thursday’s candle broke the 0.786 Fibonacci retracement at $942, the last support of the rally from the late-March low. The session also printed the largest volume bar on the chart since February.
Meanwhile, the Relative Strength Index (RSI) slid to about 25. That is its lowest reading on the chart and deep in oversold territory.
Oversold readings often precede relief bounces, and SNDK recovered to about $860 in after-hours trading. Bulls need a daily close above $942, then $1,000, to repair the structure.
Above that, the $1,245 to $1,320 zone near the 0.618 Fibonacci level forms heavy resistance.
On the downside, losing $800 could expose $700. Below that, the 1.0 Fibonacci level at $558.58 marks the March low where the rally began.
Still, SNDK’s next move may depend less on NAND orders than on hedge fund positioning. Tech still makes up 23.5% of Goldman’s global prime brokerage book, leaving plenty of AI exposure left to unwind.
