TLDR
- SNDK stock fell 11% Monday and dropped another 7.14% in premarket Tuesday, trading around $1,187
- Investors are questioning whether AI infrastructure spending can generate sufficient returns
- Chinese chipmaker CXMT surged 466% on its Shanghai debut, raising fears of increased competition
- SK Hynix and Samsung fell 14.7% and 13.4% respectively in Asian trading
- SNDK broke below the $1,300 technical support level and its 100-day moving average
SanDisk stock is in freefall. SNDK closed Monday at $1,278.23, down 11.02%, then dropped another 7.14% in premarket Tuesday to approximately $1,187.01.
The selloff is part of a broader memory-chip rout rather than any company-specific news. Micron, SK Hynix, and Samsung have all been caught in the same wave of selling.
The pressure started building after a report that Nvidia could backstop up to $250 billion in financing for an OpenAI data-center project. That raised fresh concerns about circular financing — where a supplier is also a major investor in its own customer. Nvidia stock fell roughly 5% on Monday as the story spread across the sector.
Questions are also growing about whether the AI infrastructure buildout can actually generate sufficient returns. Memory stocks had run hard on expectations of sustained data-center demand. Investors are now reassessing those bets.
Chinese competition added another layer of worry. ChangXin Memory Technologies, known as CXMT, made its Shanghai stock market debut and its stock surged approximately 466% on the first day of trading. CXMT raised around $8.6 billion in what was described as the largest semiconductor IPO in mainland China’s history, giving it a valuation of roughly $484 billion.
CXMT currently focuses on DRAM, while SanDisk specializes in NAND flash. But investors are concerned that well-funded Chinese manufacturers could eventually move into NAND — a more price-driven market where state-backed competitors can be particularly disruptive.
Reports that Chinese companies are also making progress in developing domestic deep ultraviolet lithography equipment added to those concerns, raising the prospect that China could expand its semiconductor manufacturing capacity more broadly over time.
Global Memory Stocks Hit Hard
The damage has been severe in Asia. SK Hynix fell approximately 14.7% and Samsung dropped around 13.4% during Tuesday’s session, dragging South Korea’s Kospi index sharply lower. SK Hynix has now lost roughly 47% of its value since its June peak.
On the technical side, SNDK broke below the $1,300 level and its 100-day moving average during Monday’s session. That breakdown has triggered additional selling from algorithmic and momentum traders.
Options markets had already been pricing in a move of around 25% around SanDisk’s August 5 earnings report. The stock is now approaching that implied move before the report is even out.
Market Context
The Nasdaq fell 0.6% on Monday, with weakness concentrated in the chip sector. The S&P 500 was essentially flat at -0.03% and the Dow edged up 0.2%, showing the pressure is specific to semiconductors rather than a broader market story.
Nvidia is also reported to be pursuing a new round of AI infrastructure deals potentially worth more than $750 billion, which has reignited debate over whether the AI buildout is a genuine infrastructure supercycle or something more fragile.
Despite the sharp pullback, SNDK stock remains up more than 2,950% over the past 12 months.
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