Dell, Micron, and SanDisk shares fall sharply amid doubts over sustained demand for AI infrastructure and rising memory costs.
Shares of AI-linked hardware and chip stocks declined Wednesday as investors locked in gains from a prolonged rally. Dell Technologies dropped as much as 12%, hitting a session low of $397.69, after reports that Meta Platforms may lease excess AI capacity, raising concerns about oversupply in data center infrastructure.
Dell’s valuation has surged nearly 200% recently, trading at 34 times forward earnings, prompting GF Securities to downgrade the stock to “Hold.” Insider selling totaling $1.56 billion over three months has further pressured sentiment. Micron Technology fell 9% on reports of potential U.S. export restrictions on high-bandwidth memory products, adding to worries about competition from Chinese manufacturers.
The selloff reflects broader skepticism about whether current valuations can be justified by long-term AI demand trends. Memory cost increases and margin pressures in AI-optimized servers have also contributed to the downturn.