Flow God
Options-Flow Commentary
The need for more memory evident in every company's earnings report makes the market's negative view of Sandisk hard to understand. Yet splitting a stock above $1,000 is one of the dumbest moves a company can make: it hands market makers the ability to manipulate the shares through options, a risk for Sandisk. x.com x.comÂ
SanDisk is drawing aggressive long-term institutional buying that supports further upside. It posted its largest dollar buy volume ever at $1,646.55, a sign of institutions building a long-term position, and weekly high-dollar volume of $140B off the recent low supports a six-month upside continuation pattern. Selling from all-time highs looks inefficient, the monthly trend is bullish, and over $140M went into August 28 $900 calls. x.com x.com x.comÂ
Sandisk's datacenter shipments and restrained bit-supply plan strengthen its growth case, without settling contract protection in a downturn. Management attributed roughly 60% of fiscal Q1 revenue growth to volume and 40% to price; datacenter sales rose 61% sequentially to $4.8B, supplying 88% of total growth. It retains mid-to-high-teens bit growth rather than accelerating supply. Consumer sales fell 29%, and the CFO cautioned against carrying Q2's growth rate into fiscal Q3. x.com x.comÂ
A large investor's bet signals serious conviction in SanDisk reaching $2,460 by December. The investor spent more than $2M on December $2,460 calls, about 55% out of the money, which is not a casual wager. Reaching $2,460 still requires a bull market, but it is not impossible. x.comÂ
Institutions are buying the dip in Sandisk and Micron, which makes the pullback a chance to buy alongside them rather than a reason to be scared off. x.comÂ
Sandisk's weak guidance and $14 billion buyback signal the AI trade is losing momentum. Per BullTheory, Sandisk guided to 18% growth after 51% last quarter, and memory stocks sold off as the market concluded memory prices have peaked. Rotation has started, including into gold. x.comÂ
SanDisk shows fresh bullish options positioning, including about $20M of out-of-the-money call buying. Answering MarketsMuse's view that these are hedges, the long-dated trades look like new positions: a June 2027 $2,860 call traded 125 contracts against open interest of 7, with similar January 2028 spreads, and nobody scalps a delta-neutral book 157% out of the money. Positioning is observable; intent is a guess. x.com x.com x.comÂ
SanDisk's short bull flag is more likely to work because it has been the liquid market leader of the cycle, and institutions keep a constant bid under such leaders. The pullback was controlled, on low volume, and was the first tap of the 20-day moving average. x.comÂ
Micron and SanDisk are headed for an epic selloff eventually, driven by market FOMO rather than the companies' fundamentals. Investors are piling in, and once a few sell, many will follow, much like Strategy in 2024 or AppLovin last year. It could come in three months or tomorrow, and the stocks may recover afterward, but stocks don't go straight up. x.com x.com x.comÂ
Sandisk's new multi-year contract model should change how the market values it and bring multiple expansion. The earnings call introduced flexible 1-, 3- and 5-year contracts that customers must keep paying for even if they no longer need the products; the contract is locked in, the price is not. That is no different from a SaaS subscription, yet SaaS firms with much lower growth and margins get far higher P/E multiples while Sandisk is capped as a cyclical. The results were mostly priced in. … Show more