The Nasdaq Composite climbed 0.83% to 25,733 today as memory chipmakers staged a sharp recovery, with SanDisk, Micron Technology and Western Digital leading a sector-wide bounce that signals renewed confidence in the artificial intelligence infrastructure trade after last week’s bruising selloff.
Memory and semiconductor stocks dominated the Nasdaq’s gainers list in midday trading, with SanDisk surging 5.22% to $1,425.54 after touching an intraday high of $1,450.00. Micron Technology added 4.65% to $888.40, while Western Digital climbed 4.47% to $498.55. The trio’s combined market capitalisation gain exceeded $45 billion in a single session.
AI infrastructure plays beyond pure memory also participated in the rally. Marvell Technology, a key supplier of custom silicon and networking chips for data centres, rose 5.77% to $199.57. Lumentum Holdings, which provides optical components for high-speed interconnects, jumped 7.43% to $787.27. Semiconductor test equipment maker Teradyne gained 5.43% to $339.85.
The strength in chip stocks lifted the broader technology complex, with the Nasdaq-100 advancing more than 1.4% intraday. However, the rally remained concentrated in AI-related names—Apple fell 2.34% to $325.94, Adobe dropped 2.24% to $231.93, and Tesla declined 2.15% to $372.65, underscoring the thematic rather than broad-based nature of the move.
Sentiment Shifting
Today’s rebound follows a volatile fortnight for semiconductor stocks that saw the sector enter technical bear-market territory. The widely followed PHLX Semiconductor Index (SOXX) fell more than 20% from its late-June peak, erasing roughly $1.2 trillion in market value as concerns mounted about overcrowded positioning, stretched valuations and potential oversupply in memory markets.
Top Australian Brokers
- Pepperstone - Top Australian broker - Read our review
- eToro - Invest in ASX and international shares - Read our review
The selloff hit memory names particularly hard. SanDisk, which was spun out from Western Digital and re-added to the Nasdaq-100 in April 2026, had dropped double digits in a single session last week despite posting extraordinary year-over-year gains of more than 3,800%. Micron Technology, the bellwether for DRAM and high-bandwidth memory demand, shed more than 20% from its June highs even as the company continued to announce multi-billion-dollar fabrication expansions in Singapore and the United States.
The debate over whether the AI-driven memory upcycle represents a multi-year supercycle or a near-term pricing bubble has intensified in recent weeks.
Bulls point to structural demand from hyperscalers building out large language model infrastructure, with DRAM, HBM and NAND serving as bottlenecks that command premium pricing.
Bears counter that much of the earnings expansion has been pricing-driven rather than unit-driven, making the sector vulnerable if memory spot markets normalise or if cloud providers slow their capital expenditure plans.
Bull Case:
- AI workload growth drives structural multi-year demand for high-bandwidth memory capacity
- Hyperscaler capex plans assume continued infrastructure buildout through 2027 and beyond
- Memory pricing remains firm in spot and contract markets despite equity volatility
- Sector drawdown creates entry point after healthy correction in crowded positioning
- Capital equipment orders and fab expansions signal confidence in sustained demand cycle
Bear Case:
- Earnings gains primarily pricing-driven and vulnerable to normalisation as supply catches up
- Sector already met technical bear market criteria with 20% peak-to-trough decline recently
- Valuations remain stretched even after correction with limited margin for guidance disappointment
- Narrow leadership and divergence from broader tech suggests late-cycle fragility risk
- Overcrowded positioning and elevated options hedging point to institutional caution persisting
Today’s rally demonstrates that dip-buyers remain active in memory and AI infrastructure stocks, treating last week’s selloff as a correction rather than the end of a multi-year theme, yet with the sector still down more than 20% from recent peaks and upcoming earnings likely to determine whether pricing power and demand growth can justify extended valuations, the tug-of-war between supercycle optimism and oversupply fears is far from resolved.
