SanDisk slid 14% in a single day, while Micron fell more than 13%—was this a “misjudgment” or a “pricing correction”?
Last night, the U.S. stock storage sector was in chaos.
SanDisk plunged 13.64%, Micron fell 13.18%, Western Digital dropped more than 8%, and the Philadelphia Semiconductor Index crashed 7%.
Things were even worse in Korea—the composite index plunged nearly 10%, and circuit breakers were triggered during trading. Samsung Electronics fell more than 11%, while SK Hynix dropped more than 11.7%.
A three-times leveraged Korea ETF tumbled 35% in a day, and the double-leveraged ETFs on SanDisk and Micron both fell more than 22%.
What is SanDisk? The best-performing stock in the S&P 500 this year. In a single day, it became the worst performer.
The market is voting with its feet. But I want to ask one question—
Is this round of sharp selloff the end of the AI storage logic, or just another panic-driven “misjudgment”?
First, let’s look at “why it fell”—the triggers of panic are quite clear.
Three things stacked on top of each other:
First, expectations for Federal Reserve rate hikes. At Wosh’s first monetary policy meeting after taking office, the dot plot showed 9 officials predicting rate hikes this year, with 6 expecting two or more hikes. Bank of America was even harsher, directly forecasting 75 basis points of cumulative rate hikes from September to December. The 10-year U.S. Treasury yield surged to 4.45%.
Growth stocks are the most sensitive to interest rates. Storage stocks rose the most—and naturally fell the hardest.
Second, the stampede after the Korean market got overheated. After the Korean stock market kept setting record highs, foreign investors sold more than 200 billion won in a single day. Korean regulators even started considering restrictions on leveraged ETFs. Storage giants such as Samsung and Hynix became the first targets for foreign selling.
Third, Goldman Sachs’ warning: “Once any major tech giant cuts AI spending first, the valuation logic of the entire AI sector will face a complete restructuring.”
With these three negative factors piling up, the market simply collapsed.
But here’s the question—has AI-driven demand for storage changed?
No.
A report from Morgan Stanley written clearly in early June states: the current situation of DRAM and NAND supply falling short of demand cannot be resolved quickly, and shortages could persist for another 2–3 years or even longer.
The data is even more straightforward: in 2026, DRAM supply will be about 7% below demand, the HBM shortfall is 6%, and that widens to 9% in 2027. AI server storage consumption is 4 to 5 times that of general servers. HBM capacity has already sold out through the end of 2026.
Now look at Micron’s earnings guidance expectations. Analysts’ consensus is that Q3 EPS will surge nearly 1000% year over year. The company’s own revenue guidance is $33.5 billion.
Earning in one quarter what would otherwise take a year—are you telling me the industry logic has broken?
Can Federal Reserve rate hikes change AI’s demand curve for HBM and NAND?
They can’t.
Rate hikes change valuation multiples, not industry trends.
Now about valuation—after the drop, is it actually expensive?
Before the selloff, Micron’s forward P/E was about 48x, which—based on historical cycles—really isn’t cheap.
But note that the valuation logic for the storage industry has already changed.
Previously, the market gave storage stocks low valuation because it assumed “capacity expansion will inevitably lead to oversupply.” But this time is different—AI-driven demand is structural, not cyclical.
Goldman Sachs has already anchored the pricing of storage stocks to P/E multiples. Morgan Stanley raised Micron’s target price from $520 to $1050, and SanDisk from $1100 to $1750. Based on 2027 fiscal year performance projections, Micron’s forward P/E is below 9x.
A 9x P/E corresponding to an industry with quarterly profit growth of 1000%—
Do you think that’s expensive?
So my conclusion is:
This round of sharp decline is more “misjudgment” than “correction.”
What is the market panicking about? It’s panicking about Federal Reserve rate hikes, the Korean selloff, and Goldman Sachs’ warning. But all of these are short-term macro noise.
What is the real underlying logic of the storage industry? It’s the rigid demand for HBM and NAND driven by AI compute buildout, the supply-demand gap that still can’t be filled before 2027, and the historic-level profit surge of companies like Micron and SanDisk.
Andrew Slimmon of Morgan Stanley Investment Management put it plainly: “These stocks are not overvalued, but the positions are too crowded. These stocks have become symbols of what momentum traders chase, and once it becomes like that, there’s no avoiding a rapid selloff. I think that’s actually healthy.”
Too much up means it has to come down, and bad logic means it has to come down—those are two different things.
So what do we do now? There are two types of people:
If you’re a trend trader—don’t try to buy the dip. The first big bearish candle after a momentum reversal is never the bottom. Wait for stabilization, wait for contracting volume, wait for panic selling to run out of steam.
If you’re a value investor—this is when you should take a serious look. The storage industry is highly cyclical, and stock prices often bottom out before fundamentals do. Back in 2022, Micron once plunged nearly 50%—what happened next? From 2023 onward, it set new all-time highs all the way.
History may not repeat itself exactly, but it always rhymes.
“The market always overreacts to short-term macro noise, while underestimating long-term industry trends.”
You’d better engrave this next to your trading software.
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