Recent declines in memory-chip shares add to concerns that AI-related semiconductor demand may face pressure from excess computing capacity and changing customer purchasing models.
Morgan Stanley Wealth Management CIO Lisa Shalett warned investors to be cautious on chip stocks, citing signs that chipmakers have limited pricing power as AI data center stacks are redesigned to incorporate lower-cost in-house chips from hyperscale cloud providers. That cautious view has been reinforced by a pullback in memory-chip shares since late June highs, with concerns emerging over excess computing capacity partly tied to news of Meta selling compute power. CCTV Finance reported on July 11 that SanDisk, Micron, Seagate and Western Digital have each fallen more than 20% in recent weeks, while analysts said the sector is also shifting toward three- to five-year supply contracts with cloud and AI data center customers.