By Micron and SanDisk stocks fell again in Wednesday’s premarket trading as investors continued unwinding two of 2026’s biggest memory trades.
Micron was down about 2% before the opening bell and SanDisk roughly 3% after falling 4.5% and 4.3% on Tuesday.
The sell-off is not evidence that artificial intelligence demand has collapsed, but reflects a harder question about whether extraordinary memory shortages, pricing and margins can survive once new supply arrives.
Micron and SanDisk sell-off accelerates on China memory fears
Tuesday’s decline marked Micron’s fourth consecutive loss and pushed the Philadelphia Semiconductor Index to a fifth straight retreat.
Investors are taking profits from companies that became some of the market’s most crowded AI winners.
“When you back off and realize there might be competition coming, all the sheep run to the door at the same time,” Dakota Wealth senior portfolio manager Robert Pavlik told Reuters.
Pavlik described the move as a rush to protect profits, as Micron and SanDisk entered the week with unusually large gains.
The trigger was China’s ChangXin Memory Technologies, but positioning supplied the fuel. Once investors questioned the scarcity story, trimming exposure became an easy decision.
CXMT threatens scarcity premium more than today’s earnings
CXMT says it plans to introduce server DDR5 memory using a denser 4F-squared cell architecture by year-end. If successful, that could eventually add meaningful Chinese supply to a market dominated by Samsung, SK Hynix and Micron.
Jefferies analysts said rapid technology transition and capacity expansion could keep sentiment towards DRAM weak. But they also cautioned that commercial viability remains uncertain, while Samsung and SK Hynix have pursued similar architectures.
Micron is directly exposed because DRAM represents most of its revenue.
SanDisk primarily sells NAND flash, so its similar decline suggests investors are treating memory as one crowded trade rather than separating each company’s exposure.
Markets are pricing a future threat before CXMT has proved it can manufacture the technology economically at scale.
Strong AI demand argues against calling the cycle broken
The strongest counterargument came from Mizuho TMT specialist Jordan Klein.
“I would not be selling or in a panic if I owned MU, SNDK, SKHY or Samsung,” Klein wrote in commentary reported by Investing.com.
He said CXMT’s announcement changed “nothing near term,” arguing that a product roadmap does not establish manufacturing maturity, yields or cost competitiveness.
Wednesday delivered another useful reality check.
ASML said AI-driven demand for its chipmaking equipment will exceed planned capacity through 2028, with customers already discussing orders extending into 2029 and 2030. The Dutch group also raised its full-year sales forecast after strong third-quarter results.
That does not guarantee Micron or SanDisk can preserve today’s margins, as more manufacturing capacity eventually means more supply, precisely what investors are beginning to discount.
But ASML’s outlook makes one conclusion difficult to defend. AI infrastructure demand is not suddenly disappearing.
The debate has shifted from whether AI needs enormous amounts of memory to who captures the profits as more capacity enters the market.
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