Key Highlights

  • Micron, the bellwether of the group, reports its quarterly results after the close on Wednesday, September 30.
  • Market coverage tied Sandisk's drop to NAND and AI Demand fears after the pause, along with rising rates.
  • The 10-year Treasury Yield reached its highest level since 2007, and the 30-year its highest since 2004.
  • Nvidia was a rare bright spot among chips after announcing a $150 billion increase to its buyback.

Micron (NASDAQ:MU), Sandisk (NASDAQ:SNDK), Western Digital (NASDAQ:WDC) and Seagate (NASDAQ:STX) all slid on Monday, September 28, as AI jitters and soaring yields hit the memory trade just ahead of its biggest event of the week.

A nervous run-up to earnings

Memory and storage stocks have been among the hottest trades of the AI era. On Monday, September 28, they went into reverse. Micron Technology slid, Sandisk fell to $1,717.68, Western Digital dropped.

The timing stood out. Micron, the bellwether of the group, reports its quarterly results after the close on Wednesday, September 30. Rather than bid up shares into the event, traders chose to take chips off the table.

The OpenAI shock

The main trigger was the same one that rattled the whole semiconductor sector: reports that OpenAI had paused Training of some frontier models. Memory makers sell the DRAM, high-bandwidth memory and NAND flash that Fill AI servers, so any hint that big AI labs might slow their compute build-out goes straight to the heart of the bull case.

Market coverage tied Sandisk's drop to NAND and AI demand fears after the pause, along with rising rates. Seagate's decline came as profit-taking after a multi-day rally, within the sector-wide retreat. Dell (NYSE:DELL), a major buyer of memory for its servers and PCs, also fell, with memory-cost Margin concerns among the issues cited.

Yields add to the pressure

Rising interest rates made the selling easier. The 10-year Treasury yield reached its highest level since 2007, and the 30-year its highest since 2004. When bonds pay more, investors tend to trim the richest-valued stocks first, and memory names have been some of the market's biggest winners.

Micron is the prime example. After a run like that, even modest doubts can trigger outsized profit-taking.

What Wall Street expects from Micron

Analysts remain upbeat heading into the report. Consensus calls for Revenue of about $50.75 billion and Earnings of $31.45 per share, and the Options market is bracing for a big move. RW Baird's Tristan Gerra raised his price target to $1,520, JPMorgan (NYSE:JPM)'s Harlan Sur predicted a "beat-and-raise," and DA Davidson's Gil Luria sees $2,000 as reasonable.

Those views set a high bar. A strong beat with confident guidance could quickly reverse Monday's losses across the group. But Micron also reports on a crowded day that includes the PCE Inflation reading and quarter-end portfolio rebalancing, so the stock may be buffeted by more than its own numbers.

The bigger picture

Monday's memory slide was part of a broad retreat. The S&P 500 fell 59.72 points to 7,683.69, the Nasdaq Composite lost 248.34 points to 26,820.38, and decliners outnumbered advancers 2,218 to 1,185 on the Nasdaq. Nvidia (NASDAQ:NVDA) was a rare bright spot among chips after announcing a $150 billion increase to its buyback.

Micron's revenue against the estimate is the test

Watch Micron's revenue against the $50.75 billion estimate, its guidance for the next quarter, and any commentary on high-bandwidth memory pricing and AI customer demand. Any signal that customers are delaying orders after the OpenAI reports would weigh heavily on the whole group.

Sandisk, Western Digital and Seagate will likely trade in Micron's slipstream on Thursday. Beyond that, Friday's September jobs report and the path of Treasury yields will shape whether investors return to the memory trade or keep trimming.