Micron, Sandisk, and Western Digital drop over 3% as investors trim AI sector exposure on spending concerns and geopolitical tensions.
Shares of AI memory leaders Micron (MU), Sandisk (SNDK), and Western Digital (WDC) fell more than 3% in Wednesday trading, extending losses from the prior session. The declines reflect broader market jitters and growing skepticism over AI infrastructure spending by hyperscalers, despite strong demand for high-bandwidth memory (HBM).
The sector had surged earlier this year on expectations of prolonged supply constraints through 2027. However, Samsung Electronics’ record profits this week failed to buoy sentiment, while a Reuters report on Chinese AI startup DeepSeek developing its own chip added competitive pressure. The weakness spread to other semiconductor stocks, including Intel (INTC), AMD (AMD), and Broadcom (AVGO).
Fundstrat analyst Tom Lee described the pullback as a buying opportunity, maintaining a bullish outlook on AI-related stocks. The sector faces a key test this week as SK Hynix prepares to raise capital, potentially signaling confidence in long-term demand.