SanDisk (SNDK) shares closed Thursday’s session down 4.9%, as a disappointing OpenAI revenue figure sent shockwaves through the computer memory sector.
OpenAI confirmed that its annual recurring revenue as of the end of September reached only $50 billion, well short of the $68 billion figure previously posited by market observers.
The shortfall raised immediate concerns among investors about whether AI companies have enough cash flow to fund ongoing purchases of memory chips from suppliers like SanDisk.
If AI firms are not generating sufficient revenue, they may need to take on more debt to finance chip purchases, adding risk to the demand outlook for memory companies.
Bond yields declined on Thursday, offering some relief, as minutes from the last Federal Reserve Open Markets Committee meeting signaled little appetite for continued interest rate hikes.
Lower borrowing costs would normally be welcomed by SanDisk investors, since cheaper financing makes it easier for customers to purchase memory chips in volume.
However, the OpenAI revenue news overshadowed those positives, demonstrating how sensitive memory stock valuations have become to developments across the broader AI industry.
Despite Thursday’s sell-off, at least one analyst remains firmly bullish on the longer-term outlook for SanDisk and the wider memory chip market.
Lynx Equity Strategies analyst KC Rajkumar argues that memory supply in 2027 and 2028 will be “significantly tighter than in fiscal 2026,” a dynamic that should support elevated chip pricing well into the future.
Tight memory supply has already allowed SanDisk to command stronger prices for its products, and a sustained supply squeeze would continue to benefit the company’s profit margins.
The competing forces of easing interest rate pressure and weakening AI revenue growth are likely to keep SanDisk shares volatile in the near term as investors weigh both dynamics carefully.
Traders and analysts will be closely watching future revenue disclosures from major AI players to gauge whether the OpenAI shortfall represents a broader industry trend or an isolated data point.
