Sandisk’s Mixed Outlook Triggers Selloff in Memory Stocks

Shares of memory and AI-related companies fell sharply on Thursday following Sandisk's mixed earnings outlook. The company reported revenue of $8.97 billion, exceeding analysts' expectations of $8.39 billion, but provided cautious guidance for fiscal 2027, leading to a significant drop in its stock price. As a result, shares of South Korean memory chipmaker SK Hynix plummeted over 10%, closing down 10.37% on the Kospi.

Market Reaction

In premarket trading, SK Hynix's U.S.-listed shares fell more than 6% to $141.55. The stock briefly hit South Korea’s 30% daily limit-down in Nextrade's premarket session, raising concerns about the volatility of small-volume trades. Samsung Electronics also experienced a decline, dropping 6.13% amid the broader selloff in Asian technology stocks. Analysts have noted that the current market dynamics are challenging, particularly for memory makers as they navigate shifting demand from AI model training to inference workloads.

Analyst Insights

Susquehanna analyst Mehdi Hosseini highlighted that maintaining gross margins near 80% will be crucial for memory makers as the market evolves. He stated, "The key questions are whether AI inference will meaningfully boost NAND demand and whether the company can preserve its margins." Despite the selloff, some analysts remain optimistic about the AI investment cycle, with JPMorgan asserting that hyperscalers are unlikely to reduce spending significantly in the near term. They noted, "We do not see any fundamental indicators that signal meaningful weakness in the next 6-12 months."

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Based on reporting by: seekingalpha.com, benzinga.com