What Happened?
A number of stocks fell in the morning session after reports of design breakthroughs in China prompted investors to reassess expectations for tight memory and chip supplies.
The pullback extended declines from the previous session following an announcement by ChangXin Memory Technologies that it plans to release 4F-square DDR5 server modules by late 2026, boosting memory density by one-third, in remarks reported by Bloomberg. That timeline arrives roughly two years ahead of Samsung's roadmap, per Investing.com, prompting investors to reassess whether tight artificial intelligence memory supplies will loosen sooner than modeled.
Separately, Broadcom Chief Executive Hock Tan voiced caution regarding artificial intelligence investment momentum, saying "A lot of investors have no clue what they're investing in, but set very extreme expectations, only to find out that it's almost like they are in a casino gambling," during an interview at an event in Singapore, Reuters reported. The executive's comments weighed on sentiment around global semiconductor and memory manufacturers.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Memory Semiconductors company Seagate (NASDAQ: STX) fell 4.5%. Is now the time to buy Seagate? Access our full analysis report here, it’s free.
- Memory Semiconductors company Western Digital (NASDAQ: WDC) fell 4.7%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
Zooming In On Western Digital (WDC)
Western Digital’s shares are extremely volatile and have had 77 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 3.4% on the news that OpenAI paused training of its frontier artificial intelligence models following a security breach, raising concerns over near-term hardware demand.
Western Digital is up 97.5% since the beginning of the year, but at $370.61 per share, it is still trading 50.3% below its 52-week high of $746.23 from June 2026. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $6,837.
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