Memory and storage makers Sandisk, Micron, Seagate and Western Digital moved from market leaders to laggards in four months, falling into the bottom 10% of the S&P 500 since July despite strong results. Sandisk and Western Digital lost more than 44% since early July, Seagate 33% and Micron 22%. The disconnect matters for business because memory pricing and supply underpin the cost of AI infrastructure.
From market leaders to sharp correction
All four companies were among the biggest winners in the first half of 2026, Bloomberg reported, and all remain up for the year, led by Sandisk with a gain of almost 430%. The slide started in July, when chip stocks began to swing even as AI executives described demand as almost unlimited. South Korea's SK Hynix had already lost about half its value between June and August. Seagate was due to report after the close on Tuesday with analysts expecting net income to triple, while Sandisk was scheduled for Thursday.
Western Digital illustrated the pattern last week after reporting revenue up 55% to $4.38B, beating forecasts and raising its dividend by 17%. Its shares still fell 3% on Friday. Micron has dropped 15% since its record quarter in late September. Valuations now look low on paper, with Micron trading at five times expected earnings against about 19 for the index, the second-lowest multiple in the S&P 500. Strong operating numbers no longer support share prices as before.
The background is a shift in how investors view debt-funded AI buildouts. Portfolio manager Joe Tigay of Equity Armor Investments said the market signals that expectations are changing and investors question how long the earnings boom for these companies can continue. Gartner warned this month that more than $3.5T of AI infrastructure spending could face write-downs by 2030. Analysts have warned that if AI demand fades, the memory downturn could be severe after years of tight supply and concentrated buying.
What the memory selloff means for buyers
For companies buying servers, storage and cloud capacity, the selloff points to a possible easing of extreme tightness in memory markets. If suppliers fear weaker future orders, contract terms, lead times and availability of high-capacity drives and memory modules can improve in coming quarters. Large buyers with multi-quarter procurement plans gain more room to negotiate volumes and delivery schedules. Smaller firms buying through distributors and cloud providers will feel any relief later, through slower price growth rather than direct discounts.
The same situation carries clear limits for planning. Current low multiples do not confirm that memory prices have peaked, and upcoming reports from Seagate and Sandisk will shape near-term expectations. Debt exposure of hyperscalers and possible write-downs cited by Gartner affect long-term projects more than current shipments. Buyers should ask vendors about inventory levels, allocation rules, warranty terms for new high-density products, and how quotes change if AI orders slow.
The marker to watch is the next round of results and guidance from the four makers plus SK Hynix through early 2027. If revenue forecasts are cut or capital spending plans shrink while shares stay weak, the cycle has turned from shortage to surplus. That outcome would lower AI infrastructure costs but also slow new memory product launches tied to AI demand.
