TradingKey - Tech stock selling pressure re-emerges as memory stocks drop in unison, with SK Hynix tumbling 3%.
On October 16 US Eastern Time, the memory sector continued to face heavy market selling and correction pressure, with memory giants led by SK Hynix continuing to weaken. Among them, SK Hynix (SKHY) fell 3.03%, Micron (MU) and SanDisk (SNDK) both fell over 2%, while Western Digital ( WDC) and Seagate Technology (STX) dropped about 1.5%.
SK Hynix stock chart, Source: TradingView
Over the past five trading days, memory stocks generally continued to fall, with SK Hynix and SanDisk dropping a cumulative ~15%, Micron and Seagate Technology down 12%, and Western Digital falling over 10%.
The primary reasons for the memory sector's recent heavy slump are competitive pressures and cost structure concerns, with the market worried about competition from domestic Chinese memory manufacturers, particularly ChangXin Memory Technologies (CXMT), expanding capacity in the server and DRAM spaces; meanwhile, upstream equipment and components have also led the market to scrutinize structural increases in future hardware operating costs.
This week, US September CPI and PPI data released back-to-back came in higher than expected, shattering market hopes for aggressive Fed rate cuts and causing US Treasury yields to jump. The high-interest-rate environment and capital deleveraging squeezed valuations of high-P/E, high-beta semiconductor and tech stocks, triggering a three-day losing streak for memory stocks like SanDisk and SK Hynix.
Although short-term memory stock prices pulled back collectively due to macro inflation data and semiconductor deleveraging, the rigid demand for high-bandwidth memory (HBM) from AI servers remains unchanged over the medium to long term. In the short term, investors should monitor whether macro US Treasury yields peak and fall back, and whether earnings guidance from memory giants can effectively boost market confidence.
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