As of early February 2026, investors monitoring the technology sector should be aware of potential warning signs in the momentum of two well-known stocks, SanDisk Corp (NASDAQ: SNDK) and Teradyne Inc (NASDAQ: TER). Momentum, often measured by the Relative Strength Index (RSI), serves as a key barometer for traders seeking to assess the short-term trajectory of a stock based on its recent price movements. Specifically, the RSI evaluates the magnitude of recent gains relative to recent losses, providing insight into whether an asset may be overbought or oversold.
According to market standards, an RSI above 70 is typically interpreted as a signal that a stock is overbought, which may precede a corrective downturn. Both SanDisk and Teradyne exhibit RSI values substantially exceeding this threshold, implying that despite their recent positive financial performance and stock climbs, their current valuations could be vulnerable to a pullback in the near term.
SanDisk Corp: Strong Financial Performance Coupled with Elevated Momentum
On January 29, 2026, SanDisk announced second-quarter results that outperformed expectations, complemented by updated guidance for the third quarter that also surpassed analyst projections. CEO David Goeckeler highlighted the company's nimbleness in leveraging a favorable product mix, increased adoption of enterprise solid-state drives, and robust market demand, particularly in sectors powering artificial intelligence and broader technology infrastructures.
This positive outlook and operational execution have propelled the company's shares upward, with an approximate 154% gain over the preceding month, reaching a 52-week high price point of $725.00. Market observers noted a 4.6% increase in share price to $695.51 on the latest trading day, coupled with an RSI reading of 89.7, indicating an unusually high level of buying pressure.
Teradyne Inc: Outperformance Amid AI-Fueled Growth and Sequential Expansion
Similarly, Teradyne released fourth-quarter 2025 results on February 2 that beat estimates and provided first-quarter earnings per share guidance above market expectations. CEO Greg Smith attributed the company's success to AI-driven demand within its Semiconductor Test segment, including computing, networking, and memory applications. All of Teradyne’s business divisions—Semiconductor Test, Product Test, and Robotics—witnessed sequential growth, culminating in an overall 13% company-wide revenue increase in 2025.
Teradyne’s stock price responded with significant appreciation, gaining roughly 29% over the last month and touching a 52-week peak of $286.00. The latest close was $282.98, representing a 13.4% increase on the day of the report, while the RSI stood at 84.3, similarly pointing to an overbought scenario.
Interpreting Momentum Scores and Market Implications
Beyond the RSI, additional metrics such as the Edge Stock Ratings place Teradyne's Momentum score at an impressive 97.82, though its Value score is notably lower at 7.45, indicating a disparity between price appreciation dynamics and fundamental valuation metrics.
These momentum readings, combined with the recent rapid price appreciation for both stocks, suggest heightened risk of short-term price volatility. Traders and investors who prioritize momentum may interpret these technical indicators as signals warranting caution, especially when considering entry points or portfolio adjustments in the first quarter of 2026.
Summary and Forward-Looking Considerations
While SanDisk and Teradyne have both demonstrated operational strength and market appetite supported by favorable industry trends, especially in AI-related technologies, their momentum indicators imply an elevated risk of price decline in the near term. Investors should weigh these factors carefully and consider the implications of high RSI readings alongside fundamental performance.