The Broadcom Trigger: Strong Earnings, Weak Guidance
SanDisk stock plunged 11.39% on June 4, 2026, caught in the backdraft of a chip sell-off that started with a single earnings report. The spark came from Broadcom, the Palo Alto-based custom AI chip designer. The company reported results for its fiscal second quarter that looked good on the surface: profits of $2.44 per share on $22.2 billion in sales, and a forecast of $29.4 billion for the coming quarter, all ahead of the average Wall Street estimate. Yet Broadcom shares tumbled as much as 15% during the session.
The problem was tucked inside the guidance. Broadcom’s AI chip revenue projection for the third quarter was $16 billion — strong, but $1.2 billion short of the $17.2 billion that analysts had penciled in. For a market that had pushed semiconductor stocks to record highs on ever-rising expectations, a miss on the AI line was enough to trigger a wave of profit-taking. As we detailed in our earlier report on SanDisk’s volatility during the Broadcom-led selloff, the memory specialist has been swept up in sector-wide rotations before, and this week was no different.
Why the Chip Stocks Decline Today Swallowed SanDisk
The sell-off didn’t stay contained. By mid-morning, the iShares Semiconductor ETF was on track for its worst day in two months, and the Roundhill Memory ETF dropped 6%, heading for its second-worst day ever. High-flying memory names took the heaviest blows. SanDisk fell 11.39%, Intel dropped 11.28%, and even Nvidia declined 6.20% — all casualties of a market suddenly questioning whether AI chip demand could keep accelerating at the pace that justified their swollen valuations.
What made the reaction broader was the macro backdrop. On the same day, new data showed April consumer price inflation running at 3.8% year-over-year, the hottest reading in nearly three years. Crude oil climbed more than 3% to break above $100 a barrel again, after President Trump cast doubt on the ceasefire with Iran and described the Strait of Hormuz situation as on “massive life support.” Higher oil and stubborn inflation reduce the odds that the Federal Reserve will cut interest rates anytime soon, and that hits richly valued growth stocks — like those in the semiconductor market — hardest.
SanDisk’s sharp drop also reflected something the broader memory chip wreck has highlighted: even companies with stellar internal numbers can be trampled when the tide turns. As we noted in our analysis of the memory chip tumble, investors rotated out of semis and into sectors like healthcare and financial services. Micron fell more than 7% that day, and SanDisk, despite its own strengths, was unable to escape the downdraft. The tech stock sell-off was indiscriminate.
SanDisk’s Business Health Amid the Turmoil
The irony is that SanDisk’s underlying business has rarely looked stronger. In its latest reported quarter, the company posted revenue of $5.95 billion — more than triple the figure from a year earlier. Its data center segment grew an astonishing 645% year-over-year, driven by hyperscaler demand for NAND flash memory used in AI training and inference. Earnings per share came in at $23.41, nearly $9 above consensus, while adjusted gross margins expanded to 78.4% and free cash flow approached $3 billion.
Management’s forward guidance was equally robust: at least $7.75 billion in revenue and $31.5 per share of earnings for the fourth quarter. Even more important, SanDisk has fundamentally reshaped its business model. The company signed five multi-year supply agreements with hyperscaler customers, backed by over $11 billion in financial guarantees. Those contracts cover more than one-third of projected fiscal 2027 bit output, replacing the volatile spot-market pricing that once defined the NAND industry with a predictable, contracted revenue floor. That kind of structural change is rare in the memory business, and it gives SanDisk a cash flow stability that peers lack.
So if the business is humming, why did the stock fall so hard? Because in the short run, the semiconductor market often trades on momentum and macro emotion rather than financial results. When a sector leader like Broadcom signals that AI revenue expectations have overshot, the high-multiple names that rode the AI rally get sold first, regardless of their individual quality. As the data visualization below shows, the percentage drops on June 4 were remarkably similar across a range of chip stocks, confirming that the selling was about resetting expectations for the entire group, not about problems specific to SanDisk.
What Investors Are Watching Next
The immediate question is whether the selling was a one-day purge or the start of a deeper reassessment. Broadcom’s AI chip revenue still grew 143% in the second quarter, and even the softer guidance implies growth of over 200% in the third quarter. That’s deceleration only from an overheated set of forecasts. For memory makers like SanDisk, the relevance is straightforward: if hyperscalers are buying custom AI chips, they need massive amounts of memory to go with them. The long-term demand story hasn’t broken.
At the same time, the macro environment remains sensitive. Any new inflation reading or Middle East headline that pushes oil higher could renew pressure on high-valuation sectors. And as rates stay elevated, the bar for what qualifies as “good enough” growth will remain punishingly high. SanDisk’s $11 billion in supply guarantees provides a cushion, but it can’t insulate the stock from broad shifts in sentiment toward the chip sector.
Memory stocks have often seen sharp corrections that later proved to be buying opportunities, but each sell-off tests whether the AI narrative is still intact. The tech stock sell-off of early June 2026 shows that while the fundamentals of the AI buildout are real, the stock prices riding on them can be fragile when expectations miss by even a few percentage points.
Conclusion
SanDisk’s 11% plunge was not a verdict on its business — it was a symptom of a chip market that had priced in perfection and got a reminder that perfection is rare. Broadcom’s earnings, oil prices, and inflation data collided on a single trading day, and high-multiple AI names paid the price.
For anyone watching the semiconductor market, this episode reinforces a recurring lesson: the most dangerous time to hold a stock is when the story is unquestioned and the price reflects flawless execution. SanDisk’s contracted revenue pipeline and booming data center business give it a base that many peers lack, but no company is immune to a sector-wide reset of expectations.
Whether this sell-off becomes an entry point or a warning sign will depend on the next few data points — inflation prints, oil prices, and guidance from other AI infrastructure players. Until then, the chip sector is likely to remain a place where rapid gains and sudden declines coexist, and where the daily stock price often says more about the mood of the market than the health of the company behind it.
Frequently Asked Questions
Why is Sandisk stock falling today?
SanDisk stock fell sharply due to a broad semiconductor sell-off triggered by Broadcom's fiscal Q2 earnings. Although Broadcom beat expectations, its AI chip revenue guidance of $16 billion fell short of the $17.2 billion analysts expected, sparking profit-taking across the chip sector. SanDisk, as a high-multiple AI-related name, was among the hardest hit.
How did Broadcom's earnings affect the chip sector?
Broadcom reported strong Q2 results with $22.2 billion in sales and $2.44 EPS, but its Q3 AI revenue guidance disappointed Wall Street. This led to a 15% intraday drop in Broadcom shares and dragged down other chip stocks like SanDisk, Intel, and Nvidia. The sell-off reflected investor concerns that AI chip demand may be peaking.
What was SanDisk's stock price change on the sell-off day?
On June 4, 2026, SanDisk shares closed down 11.39%, according to Yahoo Finance data. The decline was part of a broader rout that saw Intel fall 11.28%, Broadcom 7.92%, and Nvidia 6.20%. The iShares Semiconductor ETF (SOXX) also had its worst day in months.
Is SanDisk's business fundamentally strong despite the stock drop?
Yes, SanDisk's fundamentals remain robust. In its latest quarter, revenue tripled to $5.95 billion, data center revenue surged 645% year-over-year, and adjusted gross margins reached 78.4%. The company also signed multi-year supply agreements with hyperscalers backed by $11 billion in guarantees. The stock decline appears driven by macro and sector rotation rather than company-specific issues.