SanDisk's stock plunged further on Tuesday, hitting premarket levels near $1,187 after losing over 11% the day before, reflecting a broader retreat in AI-focused memory stocks. This drop isn't tied to any specific news from SanDisk itself but is part of a tech-wide correction that’s shaking semiconductor giants such as Micron, Samsung Electronics, and SK Hynix.
Investors are stepping back from the booming AI memory trade amid doubts about whether the surge in spending on AI data centers will translate into sustainable profits. Nvidia's recent news about potentially backing OpenAI's data-center financing with up to $250 billion raised eyebrows, sparking fears of complicated financing and increased risk within this fast-growing sector. Nvidia shares themselves lost about 5% amid these concerns.
Adding to the unease, China's advances in semiconductor technology are pressuring the market. Domestic developments in deep ultraviolet lithography equipment and the explosive debut of ChangXin Memory Technologies (CXMT), whose shares soared roughly 466% on their Shanghai launch, have intensified worries about increased competition and falling prices down the line. CXMT’s valuation now stands near $484 billion despite lagging behind leading-edge memory tech, signaling potential shifts in global supply chains.
This wave of selling has hit Asia particularly hard, with SK Hynix and Samsung Electronics shares plunging nearly 15% and 13%, respectively. The broader semiconductor selloff shows that the AI fever around memory chips might be cooling faster than many expected, with investors reassessing valuations that had soared on the back of AI infrastructure hype.
This content is for informational purposes only and does not constitute financial advice.
