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When a stock gains 3,299% in a year, the question isn’t whether people will take profits. It’s when. For SanDisk and Micron Technology, that moment arrived in late spring, as a broad rotation out of high-momentum semiconductor names sent both stocks sliding by double digits in a matter of days.
The numbers behind the selloff
On May 12, 2026, SanDisk shares fell approximately 9% to around $1,405. Micron dropped about 9% to roughly $724. Western Digital, the third leg of the memory stool, slid about 8% to $476.
SanDisk had racked up a 552% gain year-to-date by mid-May 2026, on top of that staggering 3,299% over the previous 12 months. Micron wasn’t far behind in terms of momentum, eventually pushing to an all-time high of $1,089.29 on June 3-4, 2026.
Then came the real correction. On June 5, Micron cratered 13.3% in a single session, closing at $864.01. SanDisk sank 11.4% on that same day.
Why the rotation is happening now
For most of 2025 and into 2026, memory chip stocks were the market’s favorite trade, riding a wave of AI infrastructure spending and data center buildouts. Micron’s Cloud Memory revenue hit $5.28B, with a gross margin of 66%. Western Digital posted greater than 50% gross margins and raised its dividend by 20% to $0.15 per share.
Institutional investors started rotating capital into less expensive corners of the market, specifically value and dividend stocks that had been left behind during the AI frenzy.
Supply constraints as a price floor
Tight supply in both DRAM and NAND markets means these companies can maintain healthy margins even if unit volumes temporarily plateau. Analysts have noted that demand for memory solutions could remain elevated through the end of the decade, driven by the continued buildout of AI infrastructure globally. One projection pegs Micron’s stock with a potential 41% upside from its post-correction levels.
What this means for investors
Micron’s 66% gross margin on Cloud Memory revenue and Western Digital’s dividend increase signal confidence in forward cash flows. But the initial 9% drops in May were followed by even steeper declines in early June, which suggests the rotation still has momentum.
For those watching from the sidelines, the key metric to monitor is gross margin trajectory over the next two quarters. If Micron and SanDisk can maintain margins above 60% even as stock prices compress, it would confirm that the selloff is about positioning rather than deteriorating business quality.
Samsung and SK Hynix are the other major players in DRAM and NAND, and their capacity expansion plans will determine how long the current supply tightness persists. Any signal of aggressive capacity additions from Korean manufacturers could undermine the pricing power thesis that’s currently supporting Micron and SanDisk through this correction.
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