Micron and SanDisk stocks suffered heavy losses as investors fled artificial intelligence stocks, even as Apple’s warning about soaring memory-chip prices suggested shortages were far from over.
Micron shed roughly 22% last week, while SanDisk plunged 27.4%. Both recovered modestly on Friday, rising 5.12% and 3.55%, but the rebound barely offset losses.
SanDisk shares ended Friday’s session at $835.06, while Micron closed at $690.
Why are Micron and SanDisk stocks falling?
Thursday brought the sharpest damage. Micron lost 17.46% and SanDisk fell 22.26% as the Philadelphia Semiconductor Index plunged approximately 12.25%. Investors were reassessing the financial and political risks surrounding the expansion of AI data centres.
Democratic gains in the US midterm elections raised concerns about tougher permitting rules, electricity costs and local opposition to new facilities.
Meanwhile, cloud companies’ borrowing requirements have sharpened questions about how quickly investments in computing infrastructure will generate returns.
If projects are delayed, orders for chips and storage could eventually weaken. That prospect matters for suppliers whose valuations assume continued expansion, even when current sales remain strong.
Futurum’s chief market strategist Shay Boloor argued that AI investment could shift outside the United States if domestic construction slowed, according to reporting published by Yahoo Finance on November 5. That would redistribute demand rather than necessarily eliminate it.
Friday’s rebound offered limited relief. Neither the preceding crash nor the recovery establishes that manufacturers’ customer orders have suddenly changed.
Apple’s memory warning points to persistent shortages
Apple’s chief executive John Ternus described memory pricing as “unprecedented” during the November 2 call. Apple expects December-quarter gross margins of 45% to 46%, down from 47.9% in September, as memory costs rise further.
The September margin included a temporary tariff-refund benefit, so not all the projected decline reflects dearer chips. Still, Apple’s warning highlights a supply problem affecting even buyers with purchasing power.
AI servers are absorbing advanced manufacturing capacity, squeezing supplies for smartphones and computers.
TrendForce forecasts fourth-quarter contract prices for conventional DRAM to rise 10% to 15%, and NAND flash by 15% to 20%.
Micron produces both types, while SanDisk concentrates on NAND storage. Higher contract prices can support their revenue and profitability, although long-term agreements may limit immediate gains.
AJ Bell analyst Dan Coatsworth warned that Apple devices could become more expensive, which was “not ideal” when consumers were already struggling with living costs.
Micron, SanDisk stock today: Can earnings help?
The financial results hardly suggest an immediate collapse. Micron reported fiscal fourth-quarter revenue of $54.23 billion, up from $11.32 billion a year earlier, and an 86.8% GAAP gross margin. It forecast roughly $61.5 billion in next-quarter revenue.
SanDisk reported fiscal first-quarter revenue of $11.03 billion, up 23% sequentially, with an 85% GAAP gross margin. Its data-centre business grew 61% to $4.80 billion, although consumer revenue declined 29%.
Management expects revenue of $12.2 billion to $12.6 billion next quarter. SanDisk also plans an eight-for-one stock split, effective November 19, which changes per-share prices without increasing the company’s value.
Bernstein analyst Stacy Rasgon retained a bullish $3,000 pre-split price target for SanDisk, citing tight NAND supply and customer contracts.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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