The recent decline in storage stocks, including SanDisk (SNDK), Western Digital, Micron Technology, and Seagate Technology, can be attributed to a crowded-trade unwind, where investors are taking profits after a significant run-up in prices. The sharp decline, with SanDisk falling 12% and others following suit, suggests a valuation reset rather than a fundamentals break.

The fact that SanDisk's six-month gains exceeded 1,100% and bullish targets were piling up indicates that expectations had become overly optimistic. This correction can be seen as a healthy shakeout, as it brings valuations back to more reasonable levels.

However, it's also possible that this could be the start of a deeper de-rating for AI storage stocks. If investors continue to lose risk appetite and profit-taking accelerates, it could lead to a more significant decline in prices.

Regarding the question of whether SNDK is a buy under $500, it depends on various factors, including the company's fundamentals, industry trends, and overall market conditions. While the stock's decline may present a buying opportunity, it's essential to consider the potential risks and uncertainties surrounding the AI storage sector.

To make an informed decision, it's crucial to analyze SanDisk's financials, competitive position, and growth prospects, as well as the broader industry trends and market sentiment. If the company's fundamentals remain strong, and the decline is solely due to valuation reset, then buying under $500 might be a good opportunity. However, if the decline is a sign of a deeper industry-wide issue, it may be wise to exercise caution and wait for further clarification before making a investment decision.