SanDisk stock drops as Samsung-led chip selloff hits memory sector

Shares of SanDisk Inc. SNDK fell sharply in trading on Tuesday as a broad selloff in memory-chip stocks spread from South Korea to US markets despite strong preliminary earnings from Samsung Electronics.

SanDisk shares declined 8% after falling 23% over the previous three trading sessions.

The stock has been one of the strongest performers in the US technology sector this year, gaining about 635% year to date and more than 3,750% over the past 12 months.

The decline came as investors took profits across the memory-chip sector following steep gains in semiconductor stocks driven by artificial intelligence demand.

Samsung results fail to lift memory stocks

The selling pressure followed Samsung Electronics' preliminary second-quarter earnings announcement.

The South Korean technology company projected operating profit of 89.4 trillion won ($58.44 billion), representing a 19-fold increase from the same period a year earlier. Samsung also forecast revenue of 171 trillion won, up 129% year over year.

Despite the stronger-than-expected results, Samsung shares fell 6.9% in South Korean trading as investors appeared to lock in gains after a prolonged rally. The stock has risen about 380% over the past year.

SK Hynix also declined 6.1%, with the two companies together accounting for more than half of the Kospi index's market capitalization.

The broader South Korean market came under pressure as heavy selling in chipmakers pushed the Kospi down as much as 8.2% during the session, briefly placing the index in bear market territory before trimming some losses.

US memory stocks follow global decline

The weakness in South Korea quickly spread to US semiconductor stocks.

Micron Technology and Western Digital fell 7.3% and 8.14% respectively in trading.

The Roundhill Memory ETF (DRAM), whose largest holdings include Samsung, SK Hynix and Micron, dropped 6.2%.

The selloff extended beyond memory-chip companies. Intel and Advanced Micro Devices each declined more than 6%, while Nvidia slipped 1.5%.

Investors appeared to be taking profits after a prolonged rally in semiconductor shares, particularly in companies benefiting from growing demand for AI-related memory and storage products.

Profit-taking follows strong rally

SanDisk's recent decline comes after an extended period of exceptional gains.

Although the stock has fallen more than 20% over the past three trading sessions, it remains one of the best-performing US technology stocks over the past year.

The company has previously experienced similar pullbacks, including a four-day losing streak in May and a five-day decline in March before resuming its broader upward trend.

Profit-taking was also evident across the memory sector.

Micron and SanDisk are now trading well below the highs they reached last month, while the Roundhill Memory ETF has declined 19% from its June 22 peak.

Investors are also preparing for another potential catalyst later this week, with South Korean memory-chip maker SK Hynix scheduled to begin trading on the Nasdaq on Friday.

The upcoming listing could keep attention focused on the memory-chip sector as investors continue to assess whether recent declines represent a pause in the AI-driven rally or the beginning of a broader correction following months of outsized gains.