Memory chip stocks advanced sharply in premarket trading on Tuesday, extending gains from the previous session. Micron stock gained 6.4%, while SanDisk shares rose nearly 9%, Western Digital climbed 6.6%, Seagate advanced 5.5%, and SK Hynix's U.S.-listed shares jumped 7.3%. The Roundhill Memory ETF (DRAM) rose 6.3%. Investors positioned for upbeat results from tech majors over the next two weeks that could reinvigorate the AI trade. The rebound follows weeks of heavy selling in memory stocks and the broader semiconductor sector, as investors booked profits and rotated funds into Big Tech and software names amid growing uncertainty over whether hyperscalers would continue massive AI development investments.
Memory Chip Stocks Post Sharp Premarket Gains Tuesday
The move on Tuesday came after a rebound in memory chip stocks on Monday, marking the start of the week where tech majors like Intel and Alphabet will report their quarterly earnings. Memory chip companies, barring Micron, will report towards the end of the results cycle, likely next month.
Recent Selling Pressure and AI Investment Uncertainty
The sell-off in recent weeks was exacerbated by growing uncertainty over whether hyperscalers would continue to invest the massive sums in AI development they had committed at the start of the year. Signs that the sector's blistering rally may be cooling had emerged as a growing concern for investors.
Analysts Maintain Strong Memory Demand Outlook
Analysts and companies have consistently maintained that memory demand will remain strong for the next several years.
Retail Sentiment on Stocktwits
On Stocktwits, the retail community was bullish on MU and SNDK and bearish on WDC and DRAM. One user wrote describing the premarket move: "$DRAM $SKHY $SSNLF Can you say......parabolic??" Another wrote: "Today's buys. $INTC, $MU, and $SNDK i thought it was time and everyone was panic selling so. When everyone was fearful I bought."
Investors would now turn to Intel's results on Thursday and SK Hynix's on July 29 for further cues on the chip trade.
FAQ
What did memory chip stocks do in premarket trading on Tuesday?
Memory chip stocks advanced sharply in premarket trading on Tuesday. Micron stock gained 6.4%, SanDisk shares rose nearly 9%, Western Digital climbed 6.6%, Seagate advanced 5.5%, and SK Hynix's U.S.-listed shares jumped 7.3%. The Roundhill Memory ETF (DRAM) rose 6.3%.
Why did memory chip stocks rebound on Tuesday?
Investors positioned for upbeat results from tech majors over the next two weeks that could reinvigorate the AI trade. The rebound follows weeks of heavy selling in memory stocks and the broader semiconductor sector, as investors booked profits and rotated funds into Big Tech and software names amid growing uncertainty over whether hyperscalers would continue massive AI development investments.
When will Intel and SK Hynix report earnings?
Intel will report its results on Thursday, and SK Hynix will report on July 29.
