SanDisk shares fell over 10% on Tuesday as investors sold memory and chip stocks on fresh doubts over whether the AI-led rally has moved too far, too fast. The weakness was part of a broader selloff in semiconductor stocks. Micron Technology dropped more than 7%, Intel fell 8% and Marvell Technology declined 4.5%. Other storage and memory names such as Western Digital and Seagate also came under pressure, as investors questioned whether the strong run in AI-linked hardware stocks has already priced in much of the good news.
The pressure began in Asia, where Samsung Electronics fell 6.9% in Seoul despite forecasting a 19-fold jump in second-quarter operating profit. The numbers were stronger than expected, but they were not enough for investors after a sharp rally in memory chip stocks this year. Samsung’s fall showed that even strong earnings may not be enough when expectations are already high.
SanDisk has been one of the biggest winners of the memory rally. The stock has surged heavily over the past year, helped by expectations that demand for storage and memory products will rise as AI data centres expand. But that same rally has made the stock more vulnerable to profit booking. Barron’s reported that SanDisk had already dropped 23% in early July before the latest fall, as some of the year’s strongest tech stocks started cooling off.
The latest selloff also came after a Reuters report said Chinese startup DeepSeek is developing its own AI chip. The move could reduce its reliance on chips from Nvidia and Huawei. While the project is still at an early stage, the report added to worries that the AI hardware market may become more fragmented over time.
For memory stocks, the market concern is simple. AI demand remains strong, but investors are asking whether prices and earnings are near a cyclical high. Samsung’s strong profit forecast was not taken as a fresh positive because the stock had already more than doubled this year. The same concern is now hitting US-listed memory names such as SanDisk and Micron.
Chip stocks have been among the biggest winners of the AI trade this year. Investors have bought companies exposed to high-bandwidth memory, DRAM, storage and data centre hardware on hopes that demand from AI servers will remain strong for years. But the sector has also become crowded, and any sign that expectations may be stretched is leading to sharp moves.
