Micron, SanDisk, Western Digital, CoreWeave, Nebius, and IREN stocks rose in overnight trading on Sunday following a brutal week for AI-linked equities. Micron stock gained 2.5%, while SanDisk and Western Digital shares rose about 1% each, and CoreWeave, Nebius, and IREN advanced between 1% and 1.2%. The gains offered relief from a persistent downtrend since the start of July. The semiconductor sector entered bear-market territory, with the iShares Semiconductor ETF (SOXX) declining 22% from its June 22 peak, while SanDisk emerged as the biggest loser in the S&P 500 index after shedding over 29% during the week—its worst weekly fall in over a year.
Treasury Yields and AI Valuation Concerns Drive Chip Stock Selloff
U.S. semiconductor stocks fell rapidly as investors took profits after an extended AI-driven rally and rotated into large-cap software and internet stocks. Rising Treasury yields, renewed inflation worries from higher oil prices amid escalating U.S.-Iran tensions, and concerns that AI-related valuations had become stretched weighed on the sector. The selloff intensified due to growing uncertainty over whether hyperscalers would continue to invest the massive sums in AI development that they had committed at the start of the year. Investors are awaiting earnings from companies such as Alphabet and Intel for fresh evidence that AI demand remains strong. Analysts generally view the move as a correction and sector rotation rather than a deterioration in the long-term AI investment cycle.
Retail Traders Show Bullish Sentiment on Memory and Neocloud Stocks
Retail sentiment for SOXX remained 'neutral,' unchanged from the previous week. Traders remained upbeat on the memory segment, with a 'bullish' read on MU and SNDK. A trader posted on Stocktwits: "$SNDK Just bought more. It's growing 150% a year. It's down 40% for the month from the AI correction. A no-brainer to accumulate. They locked in a multi-billion dollar deal with Facebook to provide memory chips over the next few [years]," projecting the stock to increase roughly three times in the next five years. Stocktwits sentiment was 'bullish' for CRWV and IREN, and 'extremely bullish' for NBIS. A trader noted that CoreWeave is the compute supplier for China's Moonshot AI, whose latest Kimi K3 AI model is said to be on par with leading models from OpenAI and Anthropic. Another trader posted on the SOXX stream: "SOXX semiconductor stocks are now experiencing their biggest pullback in the past year... The key question now is whether this is just a healthy correction within the semiconductor cycle or the beginning of a deeper move lower."
FAQ
What caused semiconductor stocks to decline during the week?
U.S. semiconductor stocks fell as investors took profits after an extended AI-driven rally and rotated into large-cap software and internet stocks. Rising Treasury yields, renewed inflation worries from higher oil prices amid escalating U.S.-Iran tensions, and concerns that AI-related valuations had become stretched weighed on the sector. Growing uncertainty over whether hyperscalers would continue to invest the massive sums in AI development that they had committed at the start of the year exacerbated the selloff.
How did retail traders view memory and neocloud stocks?
Retail sentiment for the iShares Semiconductor ETF (SOXX) remained 'neutral,' unchanged from the previous week. Traders showed a 'bullish' read on Micron (MU), SanDisk (SNDK), CoreWeave (CRWV), and IREN, and an 'extremely bullish' read on Nebius (NBIS). A trader highlighted SanDisk's 150% annual growth and its multi-billion dollar deal with Facebook to provide memory chips, while another noted that CoreWeave supplies compute to China's Moonshot AI, whose Kimi K3 AI model is said to be on par with leading models from OpenAI and Anthropic.
