The Roundhill Memory ETF (DRAM) has been under heavy selling pressure as concerns about the memory and technology sectors intensify. The fund recently traded around $50, down more than 33% from its yearly high. Investors are now looking to key holdings—SanDisk (SNDK), Western Digital (WDC), and Micron (MU)—for signals on whether the sell-off is overdone or justified.
SanDisk: Earnings due Wednesday
SanDisk, a minor component of the DRAM ETF at 3.76% weight, has seen its stock nearly halve from its record high, mirroring the broader memory sector's decline. The company is set to report quarterly results on Wednesday, which will provide crucial insight into its long-term contract pricing and demand trends.
Analysts expect revenue to surge 341% year-over-year to $8.4 billion, with current-quarter guidance of $10.62 billion (up 360%). Earnings per share are projected at $34.50, versus 29 cents a year ago. A strong beat and upbeat guidance could provide a much-needed catalyst for the stock and the sector.
Western Digital: Spin-off reports same day
Western Digital, which spun off SanDisk last year, will also release earnings on Wednesday. The stock has dropped over 30% from its 2025 peak. Despite the decline, the company's fundamentals remain robust, with revenue expected to rise 41% to $3.7 billion and EPS nearly doubling to $3.30 from $1.66.
Analysts are bullish, with an average price target of $655 versus the current $544. Citi recently raised its target from $685 to $800. A strong report and forward guidance would reinforce that memory demand remains solid.
Micron: No earnings this week, but sentiment driver
Micron, the second-largest holding in the DRAM ETF, has fallen 35% from its year-to-date high, despite stellar results. In its fiscal third quarter, revenue jumped to $41 billion from $9.3 billion a year earlier. Analysts expect Q4 revenue to grow 350% to $50.4 billion, which would bring annual revenue to $129 billion (up 247%).
While Micron won't report this week, its stock will react to sector news and AMD's earnings, as AMD is a major customer. Traders will watch for any commentary on AI memory demand and pricing trends.
Broader context
The DRAM ETF's decline comes amid a broader tech sell-off, with chip stocks under pressure from concerns about AI spending sustainability and potential oversupply. However, the fundamental picture for memory makers remains strong, driven by AI data center demand and tight supply. As recent coverage noted, the fund has seen record inflows even as prices fell, suggesting some investors are buying the dip.
Investors should also consider the divergence between Micron and SK Hynix, which highlights the market's selective optimism. Additionally, insider selling at Micron may weigh on sentiment, but it is not necessarily a bearish signal.
With earnings from SanDisk and Western Digital on tap, this week could be pivotal for the memory sector. Strong results and optimistic guidance could help stabilize the DRAM ETF, while disappointments might extend the slide.
This article is for informational purposes only and does not constitute financial advice.
