Shares of computer semiconductor memory maker SanDisk (SNDK -7.97%) tumbled 8.3% through 12:15 p.m. ET Monday.

You can probably blame Edgewater Research for that.

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Living on the edge

We don't yet know everything about Edgewater's report on Micron. All I've been able to learn is that StreetInsider.com has a very short write-up today advising that Edgewater thinks demand and pricing for computer memory in the first half of 2025 was "better" than...something. Maybe better than last year. Maybe better than Edgewater was expecting. Maybe better than what other analysts were forecasting.

Now the bad news: Demand and pricing will be "sub seasonal" in the second half of this year, says Edgewater, and with a "bias lower." That implies things may be getting worse, not better.

Edgewater says this is true for both SanDisk (SNDK -7.97%) and for its rival Micron (MU -4.72%), by the way.

Is SanDisk stock a sell?

So how much should this all worry you, if you own SanDisk stock?

Quite a lot, at least in the short term. SanDisk was already unprofitable, with losses amounting to $1.5 billion over the last 12 reported months. Investors were already braced for bad news this year, with analysts forecasting losses of $1.4 billion. Now that number might be getting even worse.

The good news is that SanDisk is expected to turn profitable again next year, earning perhaps $607 million. That would give the stock a P/E ratio of about 11 on 2026 earnings, versus its current P/E of...infinity, based on earnings that are still negative. If the stock sells off hard on Edgewater's latest report, and if you're patient enough to wait for this to improve next year, now might be a good time to buy this cyclical semiconductor stock.