AI server buildouts keep driving demand for memory, lifting revenue and profit at storage companies. But the capital market has begun to worry whether this high growth can last, and whether high profits will trigger a new round of capacity expansion. These concerns set off a stock market correction.
On November 5, the AI supply chain in US equities suffered a sharp pullback, with memory stocks hit hardest. SanDisk (SNDK 0.00%↑) fell about 22% in a single day, and Micron (MU 0.00%↑) and Western Digital (WDC 0.00%↑) also dropped significantly. The growth premium the market had assigned to AI storage was squeezed all at once.
Fundamentals in the memory industry have not weakened in step. Micron just reported record results for fiscal 2026, and SanDisk, in its fiscal 2027 first-quarter report released on October 29, raised its revenue guidance for the next quarter. AI storage demand remains strong.
