The market is beginning to reassess the return on investment in AI infrastructure, putting pressure on the storage and semiconductor sectors. SanDisk's stock plunged on Monday and continued to decline in pre-market trading on Tuesday, with many storage stocks in Asia and the US falling in tandem.
AI investment returns expected to weaken
Previously, the market generally expected that the expansion of data centers would continue to drive up demand for products such as storage and high-bandwidth memory, leading to a significant rise in the stock prices of related companies. However, as AI investment continues to expand, investors have begun to question whether this round of high-intensity capital expenditure can translate into sufficient returns.
The report mentioned that Nvidia may provide up to $250 billion in funding support for OpenAI's data center project. This further amplified market concerns about revolving financing and the financial risks of the AI investment chain. As a result, Nvidia's stock price fell by about 5% on Monday, and sentiment in the semiconductor sector also weakened.
China's progress exacerbates pressure on the region.
In addition to anticipated returns, competitive pressure from China is also influencing market sentiment. News of progress made by Chinese companies in domestically produced deep ultraviolet lithography equipment has raised concerns among investors that China may increase its domestic semiconductor manufacturing capabilities and reduce its reliance on overseas technologies in the future.
These concerns directly depressed the valuations of storage stocks, especially those that had previously seen significant gains, where the pullback was more pronounced.
Asian and US storage stocks fell in tandem.
Selling pressure was particularly concentrated in Asian markets on Tuesday. SK Hynix and Samsung Electronics fell by approximately 14.7% and 13.4% respectively, dragging down the South Korean Kospi index significantly. Since its June high, SK Hynix has fallen by nearly 47%.
In the US market, besides SanDisk, Micron also fell by about 2.25% on Monday and continued to weaken in pre-market trading. SanDisk closed down 11.02% on Monday at $1278.23, and fell another 7.14% in pre-market trading on Tuesday to about $1187.01. Although the recent correction is significant, its stock price has still risen by more than 2950% over the past 12 months.
