WSJ Report Sends Memory Stocks Down. SanDisk Down 9%, Micron Down 7%, Western Digital Down 5%

Shares of SanDisk (SNDK) and Micron Technology (MU) declined sharply on Tuesday after a Wall Street Journal report revealed these top tech firms have $3 trillion in off-balance-sheet commitments, primarily related to AI. The selloff appears to be pure profit-taking, as both stocks entered the day higher, with SanDisk up 653% year-to-date and Micron up 255%, with no memory-specific issues driving the decline.

Analysts are advised to act quickly, as the 30-year Treasury is at a 19-year high, and prediction markets give a 97% chance that Micron will close the day lower. The analyst who correctly predicted NVIDIA in 2010 recently named Micron Technology as one of his top 10 AI stocks, but the stock did not make the list.

The broader market is calm, with the VIX near 15, indicating low volatility. The majority of the drop reflects the stocks' already significant gains for the day, with SanDisk up 44% on the week and 653% year-to-date, Micron up 18% on the week and 255% YTD, and Western Digital up 22% on the week and 211% YTD. There are no memory-specific issues, and fundamentals from the last earnings cycle were strong across the group.

The AI-hardware trade is under pressure, with money shifting into healthcare, consumer defensive, utilities, and energy sectors. Prediction markets already price in continued weakness for Micron, with a 97.5% probability of a lower close and a 51.5% chance of closing above $940 by month-end.