Memory Stocks Extend Losses For Third Straight Day -- Rosenblatt Calls CXMT-Driven Sell-Off 'Overblown'

• CXMT’s president said recently that the company is targeting a next-generation DDR5 RDIMM launch by the end of this year.
• Rosenblatt reiterated ‘Buy’ ratings on Micron and SK Hynix stocks, per TheFly.
• According to Mizuho's Jordan Klein, CXMT's announcement changes little for memory-chip investors in the near term, but warrants monitoring.

Memory stocks extended losses on Wednesday, heading for a third consecutive session of declines amid concerns over growing competition from Chinese memory-chip maker ChangXin Memory Technologies (CXMT).

However, Rosenblatt analyst Kevin Cassidy called the selloff “overblown”. According to TheFly, the analyst argued that investors were exaggerating the immediate competitive threat.

Cassidy's assessment followed an announcement by CXMT President Cao Kanyu that the company was targeting the launch of a next-generation DDR5 registered dual in-line memory module (RDIMM) by the end of 2026.

The analyst said the market reaction overlooks the structural changes reshaping DRAM demand, per TheFly. Rosenblatt reiterated ‘Buy’ ratings on Micron and SK Hynix.

At the time of writing, Micron Technology (MU) shares were down more than 1%, SK Hynix (SKHY) fell over 3%, and SanDisk (SNDK) declined 2%. Western Digital (WDC) and Seagate Technology (STX) were also trading in the red.

What CXMT Has Announced

According to the South China Morning Post, CXMT reported progress on a new memory-chip architecture designed to increase storage density and improve efficiency.

The technology uses a smaller memory-cell structure, potentially allowing more data to be stored on a single chip.

CXMT plans to introduce a server-memory product using the design by year-end, but has not disclosed detailed specifications or a specific launch date, the publication reported.

The world’s leading DRAM producers, including Samsung Electronics and SK Hynix, are also pursuing similar technology.

Analysts Question CXMT's Competitive Threat

Mizuho technology specialist Jordan Klein also questioned the immediate market reaction. 

An Investing.com report quoted Klein saying that CXMT's announcement did not change his near-term outlook for Micron, SanDisk, SK Hynix or Samsung, although he considered the development worth watching.

Meanwhile, Jefferies noted that concerns about CXMT's technology transition and capacity expansion could weigh on DRAM sentiment, according to Investopedia. However, the firm said it remained unclear whether the technology was commercially viable.

CXMT's planned year-end product introduction remains a development to watch, particularly as questions remain about its commercial readiness and production capabilities.

What Retail Investors Think About Memory Stocks

On Stocktwits, retail investors were ‘bullish’ on SK Hynix stock, while sentiment around Micron stock, SanDisk (SNDK), Western Digital (WDC), and Seagate Technology (STX) remained in the ‘neutral’ zone.

Year to date, SNDK stock leads the pack in gains, soaring around 507%; MU has surged nearly 230%; SKHY has fallen 10%; and WDC and STX shares have surged 116% and 169%, respectively.  

By comparison, the Roundhill Memory ETF (DRAM), which tracks companies across the memory semiconductor industry, has gained 86% over the same period.

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