Shares of Western Digital Corporation (WDC) fell over 7% on Monday, settling at approximately $539 amid a widespread selloff in the memory and storage sector triggered by a significant drop in SK Hynix stock.
This decline represents WDC's price moving far from its 52-week high of $799.87. The downturn follows SK Hynix's historic plunge of more than 15% in South Korea, marking its largest single-day decline ever.
The selloff in SK Hynix was amplified by profit-taking after a strong pre-listing rally on Nasdaq, leading to a 20-minute trading halt on South Korea’s Kospi index, which dropped nearly 9% as a result.
Impact on Related Stocks
The fallout affected several major players in the industry. SanDisk saw its stock drop by over 6% in premarket trading, while Micron and Seagate also experienced declines of more than 5% and 4% respectively. The entire memory sector was significantly impacted.
Adding fuel to the fire, South Korean brokerage KIS issued a Q2 earnings forecast for SK Hynix that was nearly 8% lower than market expectations. Concerns were raised regarding slower-than-anticipated shipments of HBM4 chips, alongside SK Hynix’s reliance on HBM contracts that hindered potential gains from rising conventional DRAM prices.
This uncertainty led to questioning among investors regarding the sustainability of the current AI memory supercycle, with leading tech companies such as Nvidia, AMD, and Intel also falling in premarket trading.
Analyst Insights
While this analysis did not prevent WDC’s decline, it signals that some analysts view the current dip as a temporary setback rather than a systematic change in trend. According to Wall Street consensus, WDC maintains a Strong Buy status, with an average price target indicating roughly 11% upside potential from current levels.
On a broader note, the U.S. stock market showed resilience on the same day, with the S&P 500 up 0.4%, the Dow up 0.3%, and the Nasdaq increasing by 0.3%, underscoring that the selloff was largely sector-specific.
This material is for informational purposes only and does not constitute financial advice.
