Memory stocks sold off sharply on Wednesday as traders took profits following one of the strongest rallies in the semiconductor sector this year.
SK Hynix’s U.S.-listed ADR fell 5% to $184.50, just a day after surging 27% to $193.92. The reversal was swift but not unexpected given how far the stock had run.
The pullback spread across the group. Micron fell 3% to $953, SanDisk dropped 6% to $1,658, and Western Digital slid 4% to $541. The Roundhill Memory ETF fell 3% to $59.
The declines come after a massive year-to-date run. Micron is up 244% so far this year. SanDisk had climbed 640% through Tuesday’s close. There was no company-specific bad news driving Wednesday’s drop — it looked like straightforward profit-taking.
Micron’s most recent quarter showed revenue of $41.46 billion, up 346% year over year, with guidance pointing to $50 billion next quarter. SanDisk reported datacenter revenue up 645% year over year to $1.47 billion.
SanDisk has also posted gross margin of 78.4%, adjusted free cash flow of nearly $3 billion, and signed several multi-year deals worth tens of billions of dollars. Management guided for revenue of $7.75 to $8.25 billion next quarter, with gross margin potentially reaching 81%.
Seagate also reported strong results, with revenue up 44% year over year to $3.1 billion and a non-GAAP gross margin of 47%. The company beat EPS estimates by 59 cents. Shares have nearly tripled year to date, and analysts hold a consensus price target near $899.
Western Digital grew revenue 45% year over year to $3.3 billion, nearly doubled EPS, and cut over $3 billion in debt. The company repurchased $752 million in stock last quarter and raised its dividend. Analysts are watching its July 29 earnings report closely.
Four leveraged single-stock ETFs tied to SK Hynix launched this week, including two from Direxion and two from GraniteShares. These daily-reset products amplify intraday moves and carry significant risk, including the potential to lose an investor’s full principal in a single session.
Barron’s flagged rising competition from Chinese memory chipmakers as a longer-term concern. ChangXin Memory Technologies is preparing for an IPO that could reshape the competitive landscape.
Despite the pullback, Wall Street remains broadly bullish. SanDisk has 21 Buy ratings and five Holds. Western Digital has 20 of 24 analysts rating it a Buy. Seagate has 22 of 27 analysts with Buy ratings.
The next key event for the sector is Western Digital’s earnings on July 29, which could set the tone for the group heading into the second half of the year.
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