Micron Technology, Inc.

NASDAQ Global Select
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Somewhat Bullish +45

Why Sandisk, Micron stock are plunging upto 9% on Tuesday

📉 Memory sector stocks including SanDisk, Micron, and Western Digital fell sharply on Tuesday as investors took profits following a massive year-long rally tied to AI infrastructure demand.

📊 SanDisk shares dropped 9.39% to $1,402, while Micron Technology fell over 8.19% to roughly $730 and Western Digital declined about 7.2% to $478.

💰 SanDisk reported fiscal Q3 2026 EPS of $23.41 vs $14.66 consensus estimates with revenue surging 251% YoY to $5.95 billion driven by a 645% surge in the datacenter segment.

🚀 Micron reported adjusted Q1 2026 EPS of $4.78 vs $3.94 estimates with revenue reaching $13.64 billion supported by strong cloud memory demand and AI infrastructure spending.

💾 Western Digital beat analyst expectations for adjusted EPS at $2.72 vs $2.39, increased its dividend by 20%, and reported gross margins above 50% for the first time.

🔋 Micron's HBM production capacity is already booked into 2027, and the company recently introduced a new 256GB DDR5 RDIMM module delivering speeds up to 9,200 MT/s.

⚠️ Concerns about eventual oversupply persist as Micron plans capital expenditures above $25 billion in fiscal 2026 while competitors SK Hynix and Samsung Electronics also aggressively expand capacity.

📈 SanDisk has been the highest-beta name in the group, surging 552% year-to-date and 3,299% over 12 months, making it particularly sensitive to sector rotation.

🤝 The industry is shifting toward longer-term supply agreements with hyperscale customers to reduce reliance on volatile spot pricing amid rising demand intensity for AI systems.

Bullish Signals
  • SanDisk reported fiscal Q3 2026 EPS of $23.41, significantly above the consensus estimate of $14.66, indicating strong operational performance.
  • SanDisk's datacenter segment surged 645% year-over-year, highlighting a successful shift toward higher-value AI markets as described by CEO David Goeckeler.
  • Micron reported adjusted Q1 2026 EPS of $4.78 compared to analyst estimates of $3.94, demonstrating solid earnings growth.
  • Micron's HBM production capacity is already booked into 2027, providing visibility on future revenue streams in the high-demand AI memory sector.
  • Western Digital beat adjusted EPS expectations at $2.72 versus $2.39 and increased its dividend by 20%, signaling financial strength.
  • Western Digital achieved gross margins above 50% for the first time, reflecting improved profitability and pricing power in the storage market.
  • Micron recently launched a new 256GB DDR5 RDIMM module designed for AI workloads that delivers speeds up to 9,200 MT/s, more than 40% faster than current production modules.
  • The industry is moving toward longer-term supply agreements with hyperscale customers, reducing reliance on volatile spot pricing and stabilizing revenue streams.
Risk Factors
  • Investors are rotating out of memory stocks following a parabolic run, suggesting that valuations may have moved ahead of near-term fundamentals.
  • There are concerns that simultaneous capacity expansion across major suppliers like Micron, SK Hynix, and Samsung could lead to sharp pricing downturns once demand growth slows.
  • SanDisk is the highest-beta stock in the group and has seen massive gains (552% YTD), making it particularly vulnerable to sector-wide profit-taking and multiple compression.
Full Analysis
Shares of memory and storage companies including Micron, SanDisk, and Western Digital plunged sharply on Tuesday as investors engaged in broad profit-taking following a massive rally driven by artificial intelligence infrastructure demand. The coordinated decline saw SanDisk drop 9.39%, Micron fall over 8.19%, and Western Digital decline about 7.2%, reflecting sector-level rotation rather than company-specific fundamental deterioration. Despite the sell-off, recent earnings reports from all three companies remained robust, reinforcing the broader AI growth narrative. SanDisk reported fiscal third-quarter 2026 EPS of $23.41 against estimates of $14.66 with revenue climbing 251% year-over-year to $5.95 billion. Micron posted adjusted first-quarter 2026 EPS of $4.78 versus $3.94 estimates, while Western Digital beat expectations and increased its dividend by 20%. Analysts suggest the pullback is driven by concerns that semiconductor valuations may have moved ahead of near-term fundamentals after a parabolic rise. While demand for high-bandwidth memory (HBM) remains critical for AI accelerators, there are growing worries about potential oversupply as major suppliers like Micron, SK Hynix, and Samsung Electronics aggressively expand capacity, which could lead to pricing downturns if demand growth slows.