SanDisk Corp. (NASDAQ:SNDK) shares stayed under heavy pressure on Tuesday as investors continued to reduce their exposure to artificial intelligence-linked memory stocks.
SNDK stock closed Monday at $1,278.23 after falling 11.02% during the regular trading session. The decline continued before Tuesday’s opening bell, with the shares dropping another 7.14% to approximately $1,187.01 in premarket trading.
SanDisk stock price (Source: Google Finance)
The latest losses are part of a wider semiconductor selloff rather than the result of a clearly identified company-specific development. Micron Technology Inc., SK Hynix Inc, Samsung Electronics and other memory manufacturers have also experienced steep declines as investors question whether valuations tied to the AI infrastructure boom moved too far, too quickly.
Why Is SNDK Stock Falling?
Much of the pressure on SNDK stock appears to be driven by concerns that the AI memory trade has become overcrowded. Memory manufacturers benefited from expectations that investment in data centers would create sustained demand for storage, high-bandwidth memory and other semiconductor products.
However, investors are now reassessing whether the enormous amounts being spent on AI infrastructure can really generate sufficient returns. Reports that Nvidia could provide as much as $250 billion in financing support for an OpenAI data-center project only added to concerns about circular financing and the growing financial risks associated with the AI investment cycle. Nvidia shares fell approximately 5% on Monday as those concerns spread across the semiconductor industry.
Competitive pressure from China is also weighing on sentiment. Reports that Chinese companies have made progress in developing domestic deep ultraviolet lithography equipment raised fears that the country could eventually increase its semiconductor manufacturing capacity and reduce its reliance on foreign technology.
China’s ChangXin Memory Technologies, or CXMT, intensified these concerns. The memory-chip company’s shares surged approximately 466% during its Shanghai stock market debut, giving it a valuation of roughly $484 billion. Although CXMT is still behind industry leaders in advanced memory technologies, its expansion could create more pricing and supply pressure over the longer term.
Global Memory Stocks Face Heavy Selling
The selloff has been particularly severe in Asia. SK Hynix and Samsung Electronics fell approximately 14.7% and 13.4%, respectively, during Tuesday’s trading session, helping to drag South Korea’s Kospi index sharply lower. SK Hynix has now lost roughly 47% of its value since reaching its June peak.
Micron and SanDisk have also been hit hard in the United States. SanDisk fell around 11% on Monday, while Micron declined approximately 2.25% during the session before extending its losses in premarket trading.
Despite the sharp pullback, SNDK stock is still up more than 2,950% over the past 12 months.
