U.S. storage shares extend declines as AI memory glut fears deepen selloff

U.S. storage and memory-related shares remained under pressure as investors increasingly priced in the risk of a memory supply glut tied to new capacity from Samsung and SK Hynix and a possible plateau in AI capital spending. Over the last 24 hours, SanDisk fell 14.13%, Seagate dropped 10.38% and Micron lost 5.49%, leaving the three names down 19.59%, 17.54% and 14.36%, respectively, over the past five sessions. The latest slide follows a July 2 sector selloff that had already hit Micron, Seagate, Western Digital, SanDisk, Kioxia ADR and memory-focused ETFs. Morningstar director of research Lorraine Tan told Bloomberg TV that AI-linked stocks could fall 20% to 30% before becoming attractive again, citing fresh supply from Samsung and SK Hynix and the possibility that AI-related capital spending is nearing a plateau. Investors also reacted to news that Meta Platforms is building a cloud service to sell its own excess AI computing power, a development some took as a sign that hyperscaler capex and related chip demand may be nearing a ceiling. The pressure has spread beyond memory makers to chip equipment suppliers, while an antitrust suit accusing Samsung, SK Hynix and Micron of inflating DRAM prices has added to scrutiny. Not all analysts share the bearish view: Bank of America and Citi both lifted their SanDisk price targets to $2,500 with positive calls, and Micron reported fiscal third-quarter revenue of $41.46 billion, up 346% from a year earlier, while guiding fourth-quarter revenue to $50 billion. Whether Meta's move signals a genuine capex slowdown or simply adds a new revenue stream alongside continued AI investment is likely to remain central to the memory trade into next week.