MU, Memory Stocks Drop Premarket In Samsung-Triggered Selloff: Poll Shows Most Retail Traders Passing On SK Hynix On Friday

• Memory stocks have declined in recent days, raising concerns among investors that the AI trade may be losing steam and that a broader downturn could be underway.
• Investors took out profits after Samsung’s blowout report on Tuesday, triggering declines across the chip sector.
• Stocktwits sentiment was ‘extremely bullish’ for SNDK and DRAM, ‘bullish’ for MU, and ‘bearish’ for WDC. 

Micron and SanDisk stocks dropped over 6% in premarket trading on Wednesday, tracking the selloff in Samsung Electronics shares despite the company’s blowout preliminary results. Meanwhile, Stocktwits users remain divided on SK Hynix’s upcoming Nasdaq listing, with 40% saying they will remain on the sidelines. 

Samsung said its second-quarter operating profit is expected to rise 19-fold to 89.4 trillion won ($58.44 billion), and revenue to increase 129% to 171 trillion won – both above analysts’ expectations. Still, Samsung shares in Seoul tumbled nearly 7% on Tuesday and then another 6.3% on Wednesday. 

Shares of Samsung rival SK Hynix, which is set to list its stock on Nasdaq coming Friday, declined by a similar degree.

In the U.S., the Roundhill Memory ETF (DRAM) – which counts Samsung, SK Hynix, and Micron as its top three holdings – declined nearly 7% in the premarket session.

Memory Chip Stocks Retreat

The decline in memory stocks is an extension of the pullback over the last few days, raising concerns among investors that the AI trade may be losing steam and that a broader downturn could be underway.

There are not many catalysts behind the pullback, although concerns about elevated valuations have been building in the background. MU stock is up 228% year to date, while SNDK has gained a staggering 581%.

Retail View On MU, Memory Stocks

On Stocktwits, the retail sentiment was ‘extremely bullish’ for SNDK and DRAM, ‘bullish’ for MU, and ‘bearish’ for WDC. 

“$DRAM Where is the bottom? Share price continues to rapidly tank like a falling knife. Has the demand for memory to support the data centers ended? Something isn’t adding up,” wrote a trader. 

After Samsung’s results, SK Hynix U.S. share sale is the next big catalyst investors are watching. The offering, with a target of $28 billion and launched on Monday, has been overwhelming multiple times, Bloomberg reported on Tuesday.

However, a large section of retail investors plan to skip it altogether. According to an ongoing Stocktwits poll, about 40% of some 4,400 voters said they will skip investing in SK Hynix stock for now. That is closely followed by 36% saying they hope to invest as a long-term investment.

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