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SanDisk shares dropped 11% in a single trading session on the first day of the second half of 2026. Wall Street had just finished celebrating a strong first-half rally when the memory stock selloff erased weeks of gains in only a few hours.
The Micron stock drop in July 2026 and the parallel SanDisk crash on July 1 did not happen in a vacuum. They followed a Bloomberg report revealing that Facebook is preparing to enter the cloud computing business, a move that instantly reframed how investors think about demand for AI infrastructure. By the closing bell, Micron MU) fell 9 percent, and SanDisk SNDK) fell 10 percent; these were not projections. They were the day’s headline numbers, and they dragged the wider chip complex down with them.
What Triggered the Memory Stocks Selloff
For over a year, Meta has been one of the biggest buyers of computing power. That changed on July 1, when reports said the company plans to launch two new business lines: model services and leasing bare-metal computing power. Instead of just using server capacity, Meta now plans to sell it, competing with Amazon Web Services, Microsoft Azure, and Google Cloud, and putting pressure on AI infrastructure providers like CoreWeave.
The market reacted quickly and sharply. If Meta shifts from being a buyer to a seller, the logic goes, then some portion of the memory and compute capacity it once needed to purchase may no longer be needed at all. That single sentence explains most of the Meta cloud-oversupply fears that swept through trading desks on Wednesday morning. CoreWeave shares fell 14 percent, Corning dropped more than 13 percent, Marvell slid over 7 percent, and Lumentum lost more than 6 percent as optical component makers faced the same worries as memory chipmakers.
Not everyone thinks these fears are justified. Some analysts say that if Meta’s cloud plans work out, the company might need to expand its data centers even faster, which could actually boost hardware demand rather than hurt it. For now, the market is divided over which view will prove right.
Why Micron and SanDisk Took the Hardest Hits
One of the top financial questions that day was, “Why did Micron and SanDisk fall 9 to 10 percent on July 1, 2026? Meta cloud oversupply explained.” The answer is more complex than just one headline. Micron and SanDisk are central to the DRAM and NAND memory supply chain, so they are especially sensitive to any sign of changing demand. When a company as big as Meta hints at changing how it uses computing infrastructure, memory stocks feel the impact first and most strongly.
Two more issues made Wednesday’s decline worse. A California class action lawsuit filed the week before claims that Samsung, SK Hynix, and Micron worked together to limit DRAM supply and raise prices. This legal risk added uncertainty about pricing just as investors were already uneasy. On top of that, Citrini Research warned that DRAM prices have jumped by about 700 percent over four years, which could force major buyers to cut back just to protect their profits. This warning brought the DRAM supply concern that had been quietly growing into the open.
Micron CEO Sanjay Mehrotra has previously pushed back against negative views, defending the company’s pricing strategy and highlighting about $200 billion in planned manufacturing and research investments, including new plants in Boise, Idaho and Syracuse, New York. In the fiscal third quarter, Micron’s revenue was $41.46 billion, up 346 percent from last year, and adjusted earnings were $25.11 per share, beating the consensus estimate of $20.28. These results do not show a company with falling demand. Instead, they show a company whose stock had risen too quickly and was due for a correction.
Second-Half Profit-Taking Meets a Genuine Structural Question
“Memory stocks MU SNDK WDC selloff July 2026 second half profit taking investor analysis” is the framing that many desk strategists reached for by midday. Institutional rebalancing at the start of a new half-year period is common and tends to hit the longest-running winners hardest. Micron entered the session up roughly 250 percent year to date. SanDisk had climbed more than 850 percent over the same window. Positions of that size attract profit-taking almost by default, regardless of what news breaks on any given morning.
Western Digital provides a good comparison. After selling off SanDisk in February 2025, it now focuses solely on hard disk drives and is shielded from fluctuations in NAND prices. In the days leading up to July 1, Western Digital’s stock rose while Micron and SanDisk fell, suggesting that money was moving within the storage sector rather than leaving it altogether.
Short-seller activity added more pressure. News that Michael Burry had taken short positions against several big AI companies, including Nvidia, shook confidence across the chip industry, not just in memory chips. The Nasdaq Composite ended the day down more than 0.4 percent, which may seem small but masked much bigger losses in the most popular AI infrastructure stocks.
What Comes Next for Memory Investors
Even after Wednesday’s tough session, the basic supply and demand situation for memory chips has not changed. Micron is still up about 250 percent for the year, and SanDisk is ahead by more than 850 percent much bigger gains than the single-day drop that made headlines. Long-term contracts with minimum prices, which management expects will eventually account for nearly 40 percent of Micron’s revenue, are meant to protect the business from such market fluctuations.
The real test will come in the next few weeks, as SanDisk and Western Digital report their fiscal fourth-quarter results and as we learn more about the true size of Meta’s cloud plans. If Meta’s move increases overall demand for computing power rather than replacing current purchases, Wednesday’s sell-off will probably be seen as a sharp but short-lived adjustment. But if it signals a real change in how large tech companies approach buying versus building capacity, memory investors could be facing the start of a much longer story, not just a single volatile day.
