Storage stocks slide 5% as sector selloff hits Micron, SanDisk

US storage stocks tumbled in pre-market trading, with Micron Technology falling more than 5%, as a sector-wide selloff erased part of a months-long AI-fueled rally.

A broad selloff swept across US storage stocks in pre-market trading Wednesday, with Micron Technology Inc. falling more than 5%, SanDisk Corp. dropping 4.5% and Western Digital Corp. declining 3.5%, as profit-taking gripped a sector that had surged on AI infrastructure demand.

"The pullback is driven more by sentiment and positioning than by a clear deterioration in fundamentals," said analysts at a major investment bank. "After a sharp AI-led rally, investors are reacting to four concerns: profit-taking after a crowded run, warnings about memory prices, and the rapid growth of Chinese memory manufacturer CXMT."

Micron had surged nearly 100% over the past month, briefly pushing its market capitalization above $1 trillion, fueled by a flurry of price-target upgrades from Wall Street analysts and surging demand for high-bandwidth memory (HBM) chips used in AI data centers. The company is scheduled to report fiscal third-quarter earnings on June 24, with investors watching for guidance on HBM pricing and demand trends.

The selloff also dragged down other semiconductor names. SanDisk, which had rallied more than 5% on May 28 alongside a broader chipmaker advance, reversed course as the storage sector retreated. Western Digital, a peer in the memory and storage market, fell 3.5% in sympathy.

The decline comes amid broader concerns about memory market oversupply. Samsung's former chip chief warned that memory prices could fall from the second half of 2027 as China-led supply expands, according to industry reports. CXMT, a Chinese DRAM manufacturer, has posted rapid revenue growth, reinforcing fears that increased production capacity could pressure pricing across the industry.

For investors, the question is whether the selloff represents a buying opportunity or the start of a deeper correction. Micron shares, even after the pre-market decline, remain up roughly 80% from levels three months ago, trading at a forward price-to-earnings multiple that some analysts consider reasonable given the company's leadership in HBM and DRAM chips. Barclays recently raised its rating on Micron, signaling confidence in the company's AI-driven growth trajectory.

The broader semiconductor sector showed mixed signals Wednesday. While storage names declined, other chipmakers including Advanced Micro Devices Inc. and Arm Holdings Plc traded higher, suggesting the selloff was concentrated in memory stocks rather than a broad tech retreat.

Micron's upcoming earnings report on June 24 will be a critical test. If the company delivers strong results and forward guidance that exceeds Wall Street expectations, the current pullback could prove short-lived. If guidance disappoints, the selloff may deepen as investors reassess the sustainability of the AI memory cycle.

This article is for informational purposes only and does not constitute investment advice.