The Tradr 2X Long SNDK Daily ETF (SNXX) experienced a significant pre-market plunge of 8.58% on Thursday. The leveraged exchange-traded fund, which tracks the performance of SanDisk Corp. (SNDK), saw its gains from earlier in the week sharply reverse.

The decline follows multiple headwinds for the storage sector. Market observers have warned about the boom-bust cyclical nature of memory chips, and an AI efficiency tool called TurboQuant has triggered notable declines in major storage suppliers. Deutsche Bank has advised investors to prepare for continued AI-related disruption to the sector.

Furthermore, SanDisk itself flagged that the NAND-to-HDD cost gap has widened significantly, potentially undermining the SSD replacement thesis in AI data centers. While Barclays recently upgraded SanDisk, the 2X leveraged structure of the SNXX ETF amplified the subsequent reversal as profit-taking pressures mounted following the stock's rapid recent gains.