Shares of leading memory and storage companies suffered steep losses on Tuesday, with SanDisk (SNDK) tumbling 9.39%, Micron Technology (MU) falling more than 8.19%, and Western Digital (WDC) declining around 7.2%. The selloff marked a sharp reversal from the sector's massive year-to-date gains and appeared driven by broad profit-taking rather than any fundamental deterioration.
The pullback came just a day after Micron stock surged about 5% on Monday, extending a rally that had seen the stock more than double since late March. D.A. Davidson had reiterated a Buy rating and $1,000 price target on Micron on May 11, calling the stock a "table-pounding buy" and pointing to high-bandwidth memory (HBM), an oligopolistic DRAM market, and longer-term contracts reshaping the business. Yet the optimism was overwhelmed by a sector-wide rotation out of AI-linked winners.
Prior to Tuesday, SanDisk shares were up 552% year-to-date in 2026, Western Digital had gained 200%, and Micron was 179% higher. Over the past 12 months, SanDisk had surged an extraordinary 3,299%. The gains were fueled by insatiable demand for HBM used in AI accelerators at data centers. Recent earnings underscored the strength: SanDisk reported Q3 2026 EPS of $23.41 versus an expected $14.66; Micron posted fiscal Q1 2026 EPS of $4.78 against estimates of $3.94; and Western Digital raised its dividend by 20% with gross margins above 50% for the first time.
However, analysts noted that parabolic stock moves had stretched valuations ahead of near-term fundamentals, and simultaneous capacity expansions by Micron, SK Hynix, and Samsung raised concerns about a potential oversupply later. Micron's capital expenditure plans exceed $25 billion in fiscal 2026, and HBM production capacity is already booked into 2027. For now, large single-day swings remain common as the market debates whether the AI memory cycle is structurally different from past booms and busts.
