Sandisk's Swings Are Getting Bigger-Here's How to Play Them

With its biggest intraday drop in months immediately followed by its biggest intraday gain, Sandisk Corporation (NASDAQ: SNDK) has entered a new phase of price action. The stock had already been crowned one of the standout winners of 2025 before adding nearly 200% in the first few weeks of 2026. At one point, it was up about 1,800% since its spinoff from Western Digital. 

However, those kinds of gains do not come quietly and are rarely one-directional.

Instead, they tend to see violent swings, shifting levels of investor confidence, and rapid sentiment shifts, often within days of each other. It's no surprise that all of these have been on full display in recent sessions.

The Jan. 30 intraday drop of 20%, for example, was followed by close to a 25% gain the next trading day, a reminder that Sandisk is now a stock that demands an iron stomach. 

The question investors face as we head into the rest of February is not whether Sandisk has an attractive long-term story. It clearly does. The question is more about how to leverage this volatility to an advantage. 

Why the Bull Case Is So Strong

Before thinking tactically, it is important to understand why buyers are so aggressive on dips in SNDK stock. Since spinning out from Western Digital Corp (NASDAQ: WDC) last year, Sandisk has quickly become one of Wall Street’s favorite growth stories.

The appeal is clear. The company has broad exposure to artificial intelligence (AI), has shown impressively high margins recently, and market demand for its storage offerings is viewed as less cyclical than much of the broader semiconductor space. That makes for a rare combination in the current equity landscape.

Those themes were reinforced by last week’s earnings report, which smashed analyst expectations across the board. Revenue surged more than 60% year-over-year, earnings came in well ahead of forecasts, and forward guidance stunned the market, with fiscal third-quarter adjusted earnings per share (EPS) now expected to land between $12 and $14, versus prior expectations closer to $5. That scale of optimism helps explain why the Jan. 30 selloff was immediately absorbed and followed by fresh highs.

This is also why Sandisk should continue to attract buyers even if big downswings materialise, as they are sure to do. It’s the right company, in the right place, at the right time.

Why Volatility Is Likely to Remain

As compelling as the fundamentals look, the technical setup all but guarantees more turbulence. Sandisk’s relative strength index (RSI), for example, is now approaching 90, a level that signals extreme overheating.

That doesn’t mean the stock couldn't go higher in 2026—it certainly could. What it does mean is that sharp pullbacks and bursts of profit-taking, some of which might occur over a few days or weeks, should be expected. No stock, regardless of how strong the story is, moves in a straight line indefinitely.

With earnings now out of the way and near-term uncertainty removed, the market is clearly in the process of repricing Sandisk’s long-term potential to the upside. The risk is that a sudden selloff, be it company- or market-specific, gathers momentum and spooks investors who entered near recent highs, briefly turning a dip into something more uncomfortable.

2 Ways to Play the Volatility Through February

One possible approach for investors interested in a SNDK position is patience. Investors can wait for a pullback and be prepared to act decisively. Given the strength of the recent earnings report and the clear appetite to buy weakness, any dip should be seen as an opportunity rather than a warning sign. The danger, of course, is jumping in too early, with too much, if a pullback deepens before stabilising.

The second approach is to respect the momentum. This means building a smaller position into the current strength and planning to add during any future dips, rather than trying to pick the perfect entry point. This strategy is better suited to investors who are comfortable holding through large swings and believe the stock will be materially higher a year from now, regardless of near-term volatility.

Recent analyst commentary supports that longer-term confidence. Cantor Fitzgerald reiterated its bullish stance last week, setting a $800 price target, while UBS followed this week with a $1,000 target. With the stock still trading below $700, those targets imply meaningful upside even after the extraordinary rally already logged—investors simply have to be ready to take the lows with the highs.

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The article "Sandisk’s Swings Are Getting Bigger—Here’s How to Play Them " first appeared on MarketBeat.