Memory chip stocks extended their losses in overnight trading on Thursday after Qualcomm reported a sharp drop in handset sales, giving investors another reason to be cautious about the sector.
Micron, Sandisk and SK hynix each fell around 2.5 percent in overnight trading. The additional selling followed a rough regular session on Wednesday that saw Micron tumble 7 percent, Sandisk lose 8 percent and SK hynix retreat 5 percent.
Wednesday’s first selloff followed sweeping Democratic victories in the United States midterm elections, which raised concerns about tighter limits on data centre construction. The overnight weakness came after Qualcomm released disappointing smartphone sales figures, and the chip maker fell about 9 percent in extended trading, extending the pressure on memory chip stocks.
Memory chip stocks extend Wednesday losses
Qualcomm’s fiscal fourth-quarter results were mixed. Adjusted earnings of $2.17 per share beat Wall Street’s estimate of $2.16, and revenue of $10.32 billion topped expectations of $10.12 billion, although revenue fell 8 percent from a year earlier.
The problem was handsets. Sales in Qualcomm’s handset unit plunged 26 percent from a year earlier to $5.14 billion, below the $5.25 billion analysts polled by Visible Alpha had expected. Revenue in the wider chip segment fell 8 percent to $9.02 billion.
Apple’s move toward modem chips designed in house contributed to the weakness, and softer smartphone demand raises concerns for makers of DRAM and NAND parts. For memory chip stocks, the worry is that weaker phone production eventually cuts orders for those parts.
Rising memory prices have made mobile devices more expensive to build, which could affect future production volumes. Global smartphone shipments fell 20 percent in the September quarter to a 14-year low, according to Counterpoint Research, as surging memory chip costs drove up device prices amid booming demand from AI data centres.
Memory chip stocks feel the Qualcomm handset slump
Qualcomm projected fiscal first-quarter adjusted earnings between $2.15 and $2.35 per share, against analysts’ expectations of $2.29. Revenue guidance of $10.4 billion to $11.2 billion beat the consensus at the midpoint, but investors focused on weakening handset sales and profitability.
Qualcomm chief executive Cristiano Amon said Android handset sales had bottomed out and were ticking upward again. He said the first-quarter forecast includes no further sales to Apple, and the company expects revenue outside handsets to grow more than 60 percent in fiscal 2027.
Micron has benefited from growing demand for high-bandwidth memory, a part used in advanced AI processors. AI infrastructure remains its main source of growth, but slower consumer electronics purchases could complicate demand for conventional DRAM products, and that is the risk memory chip stocks now carry.
Wall Street remains bullish on Micron, with a Strong Buy consensus rating based on 28 Buy recommendations and one Hold. The average 12-month price target of $1,621.67 points to about 104 percent upside from Wednesday’s closing price, the largest implied gain among the three memory chip stocks.
Memory chip stocks face weaker phone demand
Sandisk faces particular uncertainty because of its heavy exposure to NAND flash memory, used in smartphones, computers and cloud storage systems. Concerns about whether NAND price rises can last have weighed on the shares, and Japanese maker Kioxia recently issued a disappointing outlook.
Wall Street sees the Sandisk selloff as a buying opportunity, with 15 analysts recommending Buy and 3 staying on the sidelines. The average price target of $2,080.59 points to a possible 100 percent rebound from Wednesday’s closing level.
SK hynix has also suffered from the wider semiconductor selloff despite reporting record third-quarter results in late October. The South Korean maker has signed long-term agreements with 14 large customers covering more than half its planned production capacity for 2027 and 2028, which gives memory chip stocks one reason for confidence.
All 9 analysts covering SK hynix recommend buying the shares, a unanimous Strong Buy consensus. The average 12-month price target of $268.50 points to about 88 percent upside from Wednesday’s closing price.
The week has shown how fast sentiment can turn for memory chip stocks. A few days ago the story was record earnings and rising prices; now it is weak phone sales and the chance that data centre building slows. The next set of numbers from the memory makers will show which story holds.