What happened: Sandisk (SNDK) stock fell more than 6% in premarket on Friday.
What’s behind the move: Investors appeared to “sell the news” after the memory chipmaker posted strong beats on the top and bottom lines in its fiscal third quarter. Revenue of $5.95 billion increased from $4.72 billion, and the company’s adjusted earnings of $23.41 per share sailed past Wall Street expectations of $14.51.
Sandisk sees fourth quarter revenue in the range of $7.75 billion to $8.25 billion, above a consensus estimate of $6.65 billion.
What else you need to know: Sandisk stock has surged this year as memory has become a key bottleneck in computing. Bullish sentiment from Wall Street has driven the stock to new highs: The stock is up almost 300% year to date and hit a record high on Thursday prior to its quarterly results.
While a majority of Wall Street analysts have a Buy rating on the stock, Morningstar Research Services equity analyst William Kerwin has the equivalent of a Hold.
“When we take a longer-term view here, we think that this pricing up cycle is finite,” Kerwin told Yahoo Finance on Wednesday. “We think it’s going to go on for the next couple of years here, but once it peaks, we think investors may get caught holding the bag with a precipitous down cycle thereafter when pricing comes back down to earth.”
Meanwhile, Susquehanna Research raised its price target on the stock to $2,000 per share on Friday from $1,000.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
Click here for an in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
