Shares of SanDisk Inc. (SNDK) fell sharply on Tuesday, declining 8% as a global selloff in memory-chip stocks intensified. The drop extended a three-session losing streak that has now erased over 20% of the stock's value, pulling it well off its recent highs. The weakness originated in South Korea and quickly spread to US markets, hitting the entire semiconductor sector despite strong preliminary earnings from industry leader Samsung Electronics.
Samsung's Record Earnings Fail to Stem the Tide
Samsung Electronics reported preliminary second-quarter results that exceeded expectations, projecting operating profit of 89.4 trillion won ($58.44 billion)—a 19-fold increase year-over-year—and revenue of 171 trillion won, up 129%. However, investors used the news as an opportunity to lock in gains after a prolonged rally. Samsung shares fell 6.9% in Seoul trading, dragging the broader Kospi index down as much as 8.2% before it recovered some ground.
SK Hynix, another major memory-chip maker, declined 6.1%. Together, the two companies account for more than half of the Kospi's market capitalization, amplifying the index's move. The selloff in South Korea was characterized as profit-taking following a massive run-up in AI-driven memory stocks.
US Memory Stocks Follow Suit
The selling pressure quickly crossed the Pacific. Micron Technology and Western Digital each fell more than 7%, while the Roundhill Memory ETF (DRAM)—which holds Samsung, SK Hynix, and Micron as top positions—dropped 6.2%. The weakness extended beyond pure memory plays: Intel and Advanced Micro Devices both declined over 6%, and Nvidia slipped 1.5%.
SanDisk, which had gained roughly 635% year-to-date and over 3,750% in the past 12 months, has been one of the best-performing US tech stocks. The current pullback mirrors similar corrections in May and March, which were followed by resumptions of the broader uptrend. However, the magnitude of this decline has raised questions about whether the AI-driven rally in memory chips is pausing or entering a deeper correction.
For context on the broader market impact, see our coverage of the Dow's retreat from records amid the AI chip rout.
Profit-Taking and the SK Hynix Catalyst
Investor sentiment has shifted toward profit-taking after months of outsized gains in semiconductor stocks, particularly those tied to artificial intelligence demand for memory and storage. Micron and SanDisk are now trading well below their June highs, and the Roundhill Memory ETF has declined 19% from its June 22 peak.
Adding to the sector's focus, SK Hynix is scheduled to begin trading on the Nasdaq on Friday. The listing could serve as a catalyst for renewed attention on memory-chip stocks, as investors weigh whether recent declines represent a buying opportunity or the start of a broader correction. For a deeper analysis of the ADR listing, read our comparison of SK Hynix as an AI memory play.
Market Implications
The selloff underscores the volatility inherent in high-growth sectors driven by thematic demand. While the fundamental outlook for AI-related memory remains strong, the rapid price appreciation has made stocks vulnerable to sharp pullbacks. Investors are now watching for signs of stabilization ahead of the SK Hynix debut and upcoming earnings reports from other chipmakers.
For a broader view of the day's market moves, see the Evening Digest covering Samsung's drag on chip stocks.
This article is for informational purposes only and does not constitute financial advice.
