#我的七夕交易分享 Global tech is falling across the board, but memory is taking the hardest hit: Is faith in AI wavering, or is this just a cyclical pullback?
On August 18, Nasdaq futures fell 1.23%, while SanDisk and Western Digital dropped more than 6%—is this AI-driven memory boom still “on the way,” or already nearing its end?
On August 18, U.S. stocks were broadly in the red before the opening bell. Nasdaq futures fell 1.23%, and S&P 500 futures fell 0.54%. But the real eyesore was memory chips—SanDisk and Western Digital fell more than 6%, SK hynix, Micron, and Marvell all dropped more than 5%, and even optical communications names Lumentum and Coherent followed with declines of more than 6%.
Many people are asking: Global tech is falling across the board, so why is memory getting hit the hardest? Today, we’ll break down the logic and discuss what to expect next.
There are three layers to consider: The first is the macro story, which you probably already know; the second is memory’s own “exclusive negative catalysts,” which is the key; and the third is what to expect going forward.
I. The macro layer: All tech stocks are taking a beating
Tensions in the Middle East have escalated, the navigation agreement for the Strait of Hormuz has yet to materialize, and oil prices have been pushed higher. When oil rises, inflation expectations rebound; as inflation expectations recover, the 10-year U.S. Treasury yield has climbed to 4.75%, reaching a multi-year high.
When interest rates rise, high-valuation growth stocks that rely on “discounting future cash flows” suffer the most. Funds therefore rotate from growth into defense, putting tech stocks under collective pressure. This explains “why tech stocks are falling together,” but not “why memory is falling twice as hard as the Nasdaq.” To answer that, we need to look at the second layer.
II. Four memory-specific negative catalysts: This is the real reason for the sharp drop① Wavering faith in AI—the real incremental catalyst is hereA detail in today’s news: DoubleLine Capital’s Gundlach warned that the more than $500 billion AI infrastructure financing package being promoted by Nvidia and Wall Street could very likely signal that the AI frenzy has peaked; “The Big Short” investor Burry has also repeatedly warned of excessive AI investment, saying these chips will be obsolete in a few years. Memory—especially HBM, or high-bandwidth memory—has been the strongest-performing segment of this AI rally. As faith in AI weakens, the most crowded trades are unwound first, and memory is the first to take the hit. This is not a genuine collapse in fundamentals; the positioning is simply too crowded.
② A post-earnings selloff—expectation gaps hurt more than the resultsSanDisk’s latest quarterly revenue surged 372% year over year, while Western Digital’s rose 44%; the figures looked excellent. Yet both stocks plunged after hours. There was only one reason: The guidance for the next quarter failed to meet the market’s already sky-high expectations. Even more importantly, SanDisk had risen more than 460% this year and Western Digital about 200%, so the optimistic expectations that could be reflected had already been fully priced in. Once the results landed, profit-taking was concentrated. This is what is known as an “earnings selloff.”
③ Rising rate-hike expectations—high valuations take another hitThe 10-year U.S. Treasury yield has surged to 4.75%, and the market has begun to fear rate hikes—there are reports that Fed Chair Waller is already prepared to initiate hikes as soon as inflation data rebounds. For high-valuation growth stocks already under pressure from high rates, this is a second blow. As a high-beta sector, memory is reacting even more sharply.
④ Internal cyclical disagreement—worries about “capacity expansion leading to oversupply”Memory is a classic cyclical industry: demand surges → prices rise → capacity expands → supply exceeds demand → prices fall. The market is now fiercely divided. Citi believes inventories remain low, the supply-demand sufficiency rate has fallen from 70% to 50%, and enterprise AI demand can absorb weak consumer demand, so it remains optimistic; the opposing camp believes the industry is transitioning from “capacity expansion” toward “oversupply.” This disagreement alone is enough to send stock prices sharply up and down.
III. Expectations going forward: Short-term volatility, medium-term focus on three things
In the short term: Volatility will only get worse. As long as the question of whether “AI financing has reached its limit” remains unresolved, memory’s high-beta characteristics will continue to amplify both gains and losses. If Treasury yields fall or either oil prices or tensions in the Middle East ease even slightly, there could be a technical rebound; but a true reversal will require concerns over AI financing to be disproved, or major companies to validate the story with tangible capital spending.
In the medium term: The market is split into two camps.
The optimists, including Citi, say inventories are low and enterprise AI demand is only just getting started, so the cycle is not over; the cautious camp says the capacity expansion cycle has peaked and prices are set to fall.
To really distinguish between the two, watching three indicators is enough: HBM price trends, major manufacturers’ guidance for the next quarter, and whether AI capital spending is actually being implemented.
In summary, this looks more like “the rally went too far and needs to catch its breath + expectations need to be reset” than “AI is over.” As a cyclical stock, memory is about watching for the bottom rather than the ceiling; but as the most crowded AI trade right now, it will still be driven by unwinding pressure in the short term.$SNDK
On August 18, Nasdaq futures fell 1.23%, while SanDisk and Western Digital dropped more than 6%—is this AI-driven memory boom still “on the way,” or already nearing its end?
On August 18, U.S. stocks were broadly in the red before the opening bell. Nasdaq futures fell 1.23%, and S&P 500 futures fell 0.54%. But the real eyesore was memory chips—SanDisk and Western Digital fell more than 6%, SK hynix, Micron, and Marvell all dropped more than 5%, and even optical communications names Lumentum and Coherent followed with declines of more than 6%.
Many people are asking: Global tech is falling across the board, so why is memory getting hit the hardest? Today, we’ll break down the logic and discuss what to expect next.
There are three layers to consider: The first is the macro story, which you probably already know; the second is memory’s own “exclusive negative catalysts,” which is the key; and the third is what to expect going forward.
I. The macro layer: All tech stocks are taking a beating
Tensions in the Middle East have escalated, the navigation agreement for the Strait of Hormuz has yet to materialize, and oil prices have been pushed higher. When oil rises, inflation expectations rebound; as inflation expectations recover, the 10-year U.S. Treasury yield has climbed to 4.75%, reaching a multi-year high.
When interest rates rise, high-valuation growth stocks that rely on “discounting future cash flows” suffer the most. Funds therefore rotate from growth into defense, putting tech stocks under collective pressure. This explains “why tech stocks are falling together,” but not “why memory is falling twice as hard as the Nasdaq.” To answer that, we need to look at the second layer.
II. Four memory-specific negative catalysts: This is the real reason for the sharp drop① Wavering faith in AI—the real incremental catalyst is hereA detail in today’s news: DoubleLine Capital’s Gundlach warned that the more than $500 billion AI infrastructure financing package being promoted by Nvidia and Wall Street could very likely signal that the AI frenzy has peaked; “The Big Short” investor Burry has also repeatedly warned of excessive AI investment, saying these chips will be obsolete in a few years. Memory—especially HBM, or high-bandwidth memory—has been the strongest-performing segment of this AI rally. As faith in AI weakens, the most crowded trades are unwound first, and memory is the first to take the hit. This is not a genuine collapse in fundamentals; the positioning is simply too crowded.
② A post-earnings selloff—expectation gaps hurt more than the resultsSanDisk’s latest quarterly revenue surged 372% year over year, while Western Digital’s rose 44%; the figures looked excellent. Yet both stocks plunged after hours. There was only one reason: The guidance for the next quarter failed to meet the market’s already sky-high expectations. Even more importantly, SanDisk had risen more than 460% this year and Western Digital about 200%, so the optimistic expectations that could be reflected had already been fully priced in. Once the results landed, profit-taking was concentrated. This is what is known as an “earnings selloff.”
③ Rising rate-hike expectations—high valuations take another hitThe 10-year U.S. Treasury yield has surged to 4.75%, and the market has begun to fear rate hikes—there are reports that Fed Chair Waller is already prepared to initiate hikes as soon as inflation data rebounds. For high-valuation growth stocks already under pressure from high rates, this is a second blow. As a high-beta sector, memory is reacting even more sharply.
④ Internal cyclical disagreement—worries about “capacity expansion leading to oversupply”Memory is a classic cyclical industry: demand surges → prices rise → capacity expands → supply exceeds demand → prices fall. The market is now fiercely divided. Citi believes inventories remain low, the supply-demand sufficiency rate has fallen from 70% to 50%, and enterprise AI demand can absorb weak consumer demand, so it remains optimistic; the opposing camp believes the industry is transitioning from “capacity expansion” toward “oversupply.” This disagreement alone is enough to send stock prices sharply up and down.
III. Expectations going forward: Short-term volatility, medium-term focus on three things
In the short term: Volatility will only get worse. As long as the question of whether “AI financing has reached its limit” remains unresolved, memory’s high-beta characteristics will continue to amplify both gains and losses. If Treasury yields fall or either oil prices or tensions in the Middle East ease even slightly, there could be a technical rebound; but a true reversal will require concerns over AI financing to be disproved, or major companies to validate the story with tangible capital spending.
In the medium term: The market is split into two camps.
The optimists, including Citi, say inventories are low and enterprise AI demand is only just getting started, so the cycle is not over; the cautious camp says the capacity expansion cycle has peaked and prices are set to fall.
To really distinguish between the two, watching three indicators is enough: HBM price trends, major manufacturers’ guidance for the next quarter, and whether AI capital spending is actually being implemented.
In summary, this looks more like “the rally went too far and needs to catch its breath + expectations need to be reset” than “AI is over.” As a cyclical stock, memory is about watching for the bottom rather than the ceiling; but as the most crowded AI trade right now, it will still be driven by unwinding pressure in the short term.$SNDK
