Micron Technology and SanDisk pulled back in pre-market trading on Wednesday, giving up part of Tuesday's sharp gains as investors reassessed how much AI-driven optimism is already priced into memory stocks. Micron slipped as much as about 1.1% before trimming losses to roughly 0.3%, while SanDisk fell about 0.5%.
The pullback followed a strong session on Tuesday, when SanDisk surged 6.8% to close at $1,887.04 and Micron gained 5% to end at $1,096.16. SanDisk is up more than 600% this year, while Micron has gained roughly 14% in September and more than 500% over the past 12 months.
SanDisk's rally was supported by Rosenblatt analyst Kevin Cassidy initiating coverage with a Buy rating and a $2,400 price target. Cassidy argued that AI is changing NAND economics, moving flash memory from commodity storage toward a more system-critical component of AI infrastructure, with performance, density, endurance and supply certainty becoming more important. SanDisk has also said agreements with eight customers should cover about half of fiscal 2027 bit production and roughly two-thirds in fiscal 2028.
Micron faces several risks ahead of its Sept. 30 earnings report. Workers at its Taoyuan facility in Taiwan are preparing for a possible strike vote after mediation over profit sharing failed. The union is seeking a permanent system allocating 15% of operating profit to employee bonuses. No strike has been called and production has not been affected, but Taiwan is Micron's largest manufacturing hub and a key production center for DRAM and high-bandwidth memory used in AI servers.
Valuation pressure is also building. Michael Burry has increased short exposure to Micron and other AI-linked investments, arguing memory stocks have become expensive after a sharp rally. Competition is increasing as China's CXMT began mass production of a new DRAM platform, while Samsung and SK Hynix continue investing heavily in advanced memory.
Still, the broader memory supply picture remains tight. Stifel analyst Brian Chin expects Micron's revenue to rise about 22% sequentially in the fiscal fourth quarter, then slow to around 11% growth in the following quarter. Micron's fiscal third-quarter DRAM revenue reached $31.3 billion, up 343% from a year earlier, creating difficult comparisons. Beth Kindig of I/O Fund said that type of growth is likely in the rearview mirror, even if the cycle remains strong.
