SNDK Fades the OpenAI Revenue Miss Two Days Before Q3 Earnings

The OpenAI Domino

The catalyst is not a SanDisk story. The Wall Street Journal reported Tuesday that OpenAI has fallen short of its own internal user and revenue targets, missing a one-billion weekly active user goal for ChatGPT and slipping below monthly revenue marks as Anthropic and Google's Gemini took share late last year. CFO Sarah Friar reportedly warned colleagues that if growth doesn't accelerate, the company will struggle to fund its compute commitments against an AI capex bill set to hit $660 billion. OpenAI called the report 'clickbait' and said the business is 'firing on all cylinders.'

The market took the report at face value. Oracle, CoreWeave, and AMD all sold off on the print, with SoftBank — OpenAI's $60B backer — dropping 10% in Tokyo. Memory got hit alongside compute: Micron fell 5.63% and NVIDIA 3.26% as traders re-priced the AI capex narrative. SanDisk slid 6.74% in spot, leading a 3.20% decline in the broader Technology Equipment sector. The HIP-3 perp is tracking that move with a 22h drawdown of 5.88% to $1015 on $32.4M of volume.

Yesterday's Melius Target Is Today's Profit-Taking Setup

The selloff is happening from a fresh all-time high. Melius Research initiated SNDK with a Buy rating on Monday at a $1,350 price target — the highest on the Street — arguing the AI memory cycle does not look like prior NAND cycles and that elevated margins will persist 'through the end of the decade.' That call took SNDK to fresh highs into Tuesday's open. Then the WSJ report hit, and a stock that was up roughly 61% in April became the textbook profit-taking candidate.

Options flow had already turned moderately bearish into the print, with elevated put activity and rising implied vol. Nothing in the tape suggests the long-term bull thesis broke — it suggests positioning got crowded going into a binary event, and a non-Sandisk catalyst gave traders the excuse to trim.

Earnings on Thursday

The actual catalyst is still 48 hours away. SanDisk reports fiscal Q3 on April 30, with consensus penciling in roughly $14.55 in adjusted EPS on $4.69B of revenue, against a $0.30 loss in the year-ago quarter. The company's own guide was $4.40B-$4.80B in revenue and $12.00-$14.00 in non-GAAP EPS, so the Street is sitting at the top of management's range.

The print will tell the market whether NAND pricing — the real engine behind the ~290% YTD move — is still tightening. If it is, today's pullback looks a lot like the Intel earnings setup the bulls front-ran last week. If guidance softens or if Sandisk hedges on AI demand visibility, the OpenAI narrative gets a second life and 6% becomes the start of the move, not the end of it.