China's latest memory-chip breakthrough has sent SanDisk (SNDK) stock into a tailspin. SNDK stock has surged 447% year-to-date (YTD), but the rally has stalled, with shares down 18% over the past five days as investors brace for tougher competition in the memory space. But the market may be overlooking an important distinction. Not all memory chips serve the same purpose. The new technology from China that is shaking up the market focuses on DRAM, but SanDisk mainly works with NAND flash storage.
That distinction could be getting lost in the selloff. Let's take a closer look.