SanDisk shares fell 4.4% in pre-open trading to $1,222.56, extending a pronounced multi-session retreat that followed a wider selloff in semiconductor stocks. The rout has been driven in part by renewed uncertainty about whether AI-related demand will support a sustained growth cycle for memory products.
Market attention intensified after Bloomberg reported that Nvidia is seeking another round of AI infrastructure contracts potentially exceeding $750 billion. The scale of that pursuit has renewed debate among investors about whether the AI investment wave represents a durable infrastructure supercycle or resembles vendor-backed financing arrangements.
Compounding those worries were reports that Nvidia may provide support for up to $250 billion in funding for OpenAI to lease computing capacity. That possibility revived scrutiny of so-called "circular" financing structures, where equipment suppliers also hold meaningful stakes in their customers - a setup that can blur commercial incentives and raise questions about the true end-market demand for hardware.
Pressure on memory stocks accelerated after Monday's session, when Micron shares plunged following the Shanghai market debut of ChangXin Memory Technologies, known as CXMT. The company raised roughly $8.6 billion in what was described as the largest semiconductor IPO in mainland China, and its shares surged 466% on the first day of trading. The magnitude of that rally unsettled global memory-chip investors.
The central investor concern is that CXMT's successful capital raise is a signal of Beijing's intensifying push to build a domestic memory industry capable of competing on price with established Western suppliers. While CXMT currently concentrates on DRAM and SanDisk is primarily a NAND flash supplier, market participants fear Chinese producers could expand into NAND - a segment characterized by greater standardization and price competition - where a state-backed entrant may be better positioned to absorb short-term losses to win market share.
Technical developments have added to the selling momentum. SanDisk slipped below a key technical support level at $1,300 and fell beneath its 100-day moving average during Monday's trading. That breach has triggered additional algorithmic and momentum-driven selling as investors position themselves ahead of SanDisk's August 5 earnings report. Options markets had already been pricing in an expected stock move of roughly 25% around that event.
The selloff has not been isolated to SanDisk. Peer memory names, including Micron, also recorded steep declines, and major South Korean and Japanese semiconductor stocks such as SK Hynix and Samsung experienced sharp drops on July 28 in reaction to the CXMT catalyst. The NASDAQ composite fell 0.6% on the day, reflecting concentrated weakness in technology, while the S&P 500 was essentially flat at -0.03% and the Dow Jones Industrials rose about 0.2% - underscoring that the stress is largely chip-specific rather than a broad market phenomenon.
Investors monitoring underwriting quality, competitive dynamics and exposure to cyclical memory demand will likely continue to watch both technical indicators and developments tied to China-backed capacity expansions and AI-related financing arrangements as the sector digests these events.