Sandisk's disappointing revenue guidance led to a decline in AI chip stocks, with shares dropping approximately 8% after the announcement. The weak outlook caused a sector-wide pullback affecting companies like Western Digital (down nearly 15%) and SK Hynix (down about 10%). Despite better-than-expected quarterly results from some companies, investors remain concerned about moderating AI-driven memory demand. Analysts indicated that while hyperscale data center demand is holding steady, high valuations in the sector exacerbate vulnerability to growth slowdown signals.

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Sandisk's Weak Guidance Sends AI Chip Stocks Tumbling

Nauman Khan

Thu, August 6, 2026 at 12:13 PM EDT1 min read

SNDK \ -6.81%

This article first appeared on GuruFocus.

Memory and AI chip stocks fell on Thursday after Sandisk ( NASDAQ:SNDK) issued revenue guidance that disappointed investors despite reporting better-than-expected quarterly results, dragging semiconductor shares lower across the U.S. and Asia.

The sector-wide pullback followed concerns that AI-driven memory demand may be moderating from exceptionally high expectations.

Sandisk shares dropped about 8% after the opening bell, while Western Digital (WDC) tumbled nearly 15% even after topping earnings and outlook estimates. In Asia, SK hynix (SKHY) sank about 10% and Samsung Electronics ( SSNLF) fell nearly 6%, weighing on South Korea's Kospi index. In U.S. trading, Micron Technology (MU) and Seagate Technology ( NASDAQ:STX) each declined about 4%, while Advanced Micro Devices (AMD), Intel (INTC), Marvell Technology ( NASDAQ:MRVL), Arm ( NASDAQ:ARM), and Texas Instruments (TXN) also traded lower.

The selloff reflected investor concerns over softer memory pricing expectations rather than weakening AI demand. Analysts noted that demand from hyperscale data centers remains resilient, although elevated valuations have left the sector vulnerable to any signs of slowing growth.