Micron (MU), SanDisk (SNDK), SK hynix (SKHY), and Western Digital (WDC) stocks declined overnight Wednesday after an 8% to 9% selloff earlier in the day. The reversal followed a Tuesday rally triggered by IBM CEO Arvind Krishna's statement that clients shifted quarterly capex spending toward servers, storage, and memory in the last few weeks of June to secure supply-constrained AI infrastructure ahead of expected price increases. Analysts attributed Wednesday's decline to profit-taking rather than weakening AI demand, with high-bandwidth memory supply expected to remain tight through 2027 supporting long-term sector fundamentals.
Micron, SanDisk, SK hynix, and Western Digital stocks fell between 0.6% and 4% overnight Wednesday, extending losses from earlier in the session despite broader markets gaining ground. The decline came as investors reduced exposure across semiconductor stocks, with AMD and Intel also falling despite favorable inflation data lifting the broader market.
IBM Statement Triggers Tuesday Rally Before Wednesday Reversal
Memory manufacturers surged Tuesday after IBM highlighted growing demand from corporate customers for physical infrastructure supporting AI workloads. IBM CEO Arvind Krishna stated: "In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases."
The statement led to a rally in memory stocks on Tuesday. The latest selloff appeared to be driven by trading activity rather than by weakening demand for AI hardware. Concerns about high valuations made the stocks vulnerable to profit-taking and a broader shift of money into other sectors.
KeyBanc Raises Micron Price Target to $1,750
KeyBanc on Tuesday lifted its price target on Micron to $1,750 from $1,600 while maintaining an 'Overweight' rating on the stock, citing optimism about AI-related demand across the semiconductor supply chain. KeyBanc said limited supplies of DRAM and NAND memory are keeping prices high. The firm added that tight supply is helping memory companies maintain strong pricing as customers compete for available chips.
Barclays Initiates SK Hynix Coverage at $330 Target
Barclays started coverage of SK Hynix with an 'Overweight' rating and a $330 price target, citing tighter supply through 2027 and only limited improvement in 2028.
UBS Raises Western Digital Price Target to $560
On Monday, UBS raised its price target on Western Digital to $560 from $375 but kept a 'Neutral' rating on the stock. The firm expects Western Digital to report results that beat Wall Street estimates and come in at the upper end of the company's guidance.
Argus Initiates SanDisk Coverage with Hold Rating
Argus initiated coverage of SanDisk with a 'Hold' rating, noting that it remains a leading supplier of NAND flash technology and is well positioned to benefit from continued demand for nonvolatile memory products. While the long-term outlook for memory demand remains favorable, Argus warned that SanDisk's shares have already reflected much of that optimism.
Supply Constraints Expected Through 2027
Demand for AI-related memory chips remains strong. The limited supply of newer memory technologies such as HBM3e and HBM4 is expected to continue until 2027, supporting the sector's long-term growth.
Retail Sentiment and Year-to-Date Performance
On Stocktwits, retail sentiment around SanDisk and SK Hynix remained in 'bullish' territory, while sentiment around Micron shifted to 'neutral' from 'bearish' the previous day. Sentiment around Western Digital remained in 'extremely bearish' territory.
So far this year, MU, SNDK and WDC stocks have gained between 198% and 580%, while SKHY stock has gained 5% since its debut last week.
FAQ
What caused memory stocks to fall overnight Wednesday?
Micron, SanDisk, SK hynix, and Western Digital stocks declined between 0.6% and 4% overnight Wednesday, extending an 8% to 9% selloff from earlier in the day. Analysts attributed the decline to profit-taking rather than weakening AI demand, following a Tuesday rally triggered by IBM CEO Arvind Krishna's statement on client capex shifts toward AI infrastructure.
What did IBM CEO Arvind Krishna say about AI infrastructure demand?
IBM CEO Arvind Krishna stated that in the last few weeks of June, clients shifted their quarterly capex spending toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases. This statement triggered a rally in memory stocks on Tuesday.
What price targets did analysts set for memory stocks?
KeyBanc on Tuesday raised Micron's price target to $1,750 from $1,600 with an 'Overweight' rating. Barclays initiated SK Hynix coverage with a $330 price target and 'Overweight' rating. UBS on Monday raised Western Digital's price target to $560 from $375 with a 'Neutral' rating. Argus initiated SanDisk coverage with a 'Hold' rating.
