Just one day after Morgan Stanley helped boost Sandisk (SNDK 0.74%) stock nearly 7% in a day, shares of the memory specialist are giving back some gains on Thursday — falling 1.7% through 11 a.m. ET.
You can blame Broadcom (AVGO 13.36%) for that.
Image source: Getty Images.
How Broadcom Q2 earnings sank Sandisk
It’s a shame, really. As recently as yesterday, Morgan Stanley was telling investors “there’s no quick fix to the memory shortage,” that DRAM prices soared 40% in Q2, and are set for another 15% rise in Q3. This would be good news for Sandisk, which, while it doesn’t make DRAM, does manufacture other forms of memory chips — in particular, “high-bandwidth flash” memory that’s also useful in AI data centers.
Recognizing this, MS boosted both its earnings estimates and its price target on Sandisk — up 59% to $1,100 per share. But it was not to last.
Reporting earnings for its fiscal Q2 2026 last night, Broadcom beat expectations on both sales and earnings, reporting profit of $2.44 per share on $22.2 billion in sales. Management also beat forecasts for Q3 guidance, predicting sales of $29.4 billion versus Wall Street’s forecast of $28.5 billion.
This news sparked a 15% sell-off in Broadcom stock this morning.
Today’s Change
(-0.74%) $-13.58
Current Price
$1817.92
Key Data Points
Market Cap
$271B
Day’s Range
$1725.17 – $1825.47
52wk Range
$37.33 – $1861.00
Volume
217.2K
Avg Vol
15.9M
Gross Margin
56.04%
What’s next for Sandisk?
Does this make sense? Maybe, a little. Some analysts have noted that Broadcom’s guidance on AI chip sales, in particular, looked a little weak. Broadcom CEO Hock Tan said AI chip sales in Q3 might bring in $16 billion, whereas Wall Street wants $17.2 billion.
Still, Broadcom grew AI chip revenue 143% in Q2, and $16 billion in Q3 would work out to better than 200% growth — not as much as analysts hoped, but still accelerating. To me, that still sounds like good news for Sandisk.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom. The Motley Fool has a disclosure policy.
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