SanDisk Corp. (SNDK) experienced a sharp decline of 5.11% during intraday trading on Thursday, extending a recent selloff in the memory chip sector.
The primary catalyst for the downturn appears to be market concerns over a potential peak in artificial intelligence infrastructure spending. Reports emerged that tech giant Meta Platforms is considering a strategic shift towards cloud computing, which involves renting out its excess computing capacity. Investors interpreted this move as a signal that massive capital expenditure on AI data centers by major technology companies may be reaching an inflection point. This raised fears that high-performance memory chips, currently in tight supply, could face oversupply in the near future, triggering broad-based selling across semiconductor stocks.
Additional selling pressure stemmed from significant profit-taking activity, as SanDisk's stock had accumulated extraordinary gains of over 850% in the first half of the year. The market's negative sentiment was further amplified by South Korea's previously announced record-scale memory chip expansion plan, which intensified medium-term supply concerns. Notably, these factors outweighed positive analyst actions, including price target increases from several financial institutions, which failed to stem the selling momentum.
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