When the Cloud Wants to Sell, the Chips Start to Spill 🌥️

Shares of SanDisk, Seagate and Micron tumbled sharply over the past 24 hours as traders repositioned for what increasingly looks like a coming memory-chip glut, with SanDisk down 14.13%, Seagate off 10.38% and Micron lower by 5.49%. The session extends a five-day stretch of losses totaling 19.59% for SanDisk, 17.54% for Seagate and 14.36% for Micron, wiping out a meaningful share of the rally those stocks had built through 2026.

The selling accelerated after Bloomberg TV reported Morningstar director of research Lorraine Tan as saying that AI-linked stocks could fall 20% to 30% before becoming buyable again, citing new supply from Samsung and SK Hynix alongside a potential plateau in AI capital spending. A separate catalyst came from Meta Platforms, which disclosed it is building a cloud service to monetize its own excess AI compute capacity, an announcement investors read as a possible early sign that hyperscaler infrastructure spending — and the chip demand attached to it — could be approaching a ceiling. The combined pressure pulled down chip-equipment names as well, and a separate antitrust suit accusing Samsung, SK Hynix and Micron of inflating DRAM prices added another layer of scrutiny to the group.

Bullish desks have not folded. Bank of America raised its SanDisk price target to $2,500 with a Buy rating, and Citi lifted its own SanDisk target to the same level days earlier. Micron's recent fiscal third-quarter revenue of $41.46 billion, up 346% year-over-year, and its fourth-quarter revenue guidance of $50 billion have left the stock trading near seven times forward earnings even after the pullback.

Analysts note that Meta's cloud plans could mark either a genuine capex slowdown or a new revenue line stacked on top of existing AI spending, a distinction that is likely to set the tone for the memory complex into next week.