SanDisk shares tumbled sharply, dropping over 11% on Monday and sliding another 7% in Tuesday's premarket to around $1,187. The stock broke below key technical support and its 100-day moving average as investors reevaluated the memory-chip sector.
The selloff extends beyond SanDisk. Major players like Samsung and SK Hynix also plunged 13% and 15% respectively on Tuesday in Asian markets, dragging South Korea's Kospi index down. This broad decline follows news that Nvidia may back up to $250 billion in funding for an OpenAI data center project, stirring doubts about the sustainability of AI infrastructure spending. Nvidia itself lost nearly 5% on Monday amid growing skepticism of circular financing risks, where suppliers invest heavily in their own clients.
Another factor rattling investors is the rapid rise of Chinese chipmaker ChangXin Memory Technologies (CXMT), whose shares soared 466% on its Shanghai market debut, valuing the company at roughly $484 billion. Although CXMT focuses on DRAM and SanDisk on NAND flash, the concern is that well-funded Chinese manufacturers backed by state support could enter the NAND space, disrupting prices and supply chains. Reports that Chinese firms are advancing in developing domestic deep ultraviolet lithography equipment add to fears of expanding semiconductor production capacity in China.
Memory stocks had surged with expectations of solid data-center demand from AI growth, but the market mood is shifting as returns from infrastructure buildouts face scrutiny. The sector's recent volatility highlights investor uncertainty over the long-term payoff of AI-driven hardware expansions.
