SanDisk stock plunged 14% on Tuesday, July 28, 2026, as part of a broader semiconductor sector selloff driven by investor concerns over the sustainability of artificial intelligence infrastructure spending. The memory chip maker’s decline mirrored losses across the industry, with the Philadelphia Semiconductor Index falling more than 5% during the session.
The selloff marked the latest chapter in a brutal month for chip stocks. The PHLX Semiconductor Index has tumbled 22.6% in July, putting it on track for its worst month in 25 years, according to MarketWatch. The index briefly broke below 11,000 on Tuesday and is now down over 25% from its June peak, as waves of selling have swept through the sector.
The core driver of the selloff is investor anxiety about whether companies can sustain the massive spending commitments required to build out artificial intelligence infrastructure. According to reporting from the New York Times on July 28, 2026, a global technology stock sell-off intensified on Tuesday, underpinned by worries over hefty bills for the build-out of artificial intelligence. Wall Street questions whether the rapid pace of AI capex growth can continue, particularly as valuations have become stretched after months of gains.
Memory chip stocks, including SanDisk, have been hit especially hard. The sector’s vulnerability stems from its central role in AI infrastructure: data centers require massive quantities of memory chips to power AI applications. However, investors now question whether the economics of these buildouts can justify current stock valuations. Earlier in July, even strong earnings results failed to support stock prices—Samsung posted record revenue and profit in early July, yet semiconductor stocks tumbled as AI spending anxiety dominated market sentiment.
The broader market context underscores the scale of the selloff. Chipmakers collectively lost around $1.3 trillion in market value in early July, according to reporting from Forbes on July 8, 2026, as Wall Street questioned AI capex growth. The decline affects not just pure-play semiconductor makers but extends to memory specialists like SanDisk, which supplies flash memory and solid-state drives to data centers and consumer electronics.
Comparable periods of semiconductor volatility have shown that these selloffs, while severe, can be temporary if the underlying demand drivers remain intact. The memory chip market has experienced cycles of shortage and oversupply before, with investor sentiment swinging sharply on earnings reports and forward guidance. The current selloff’s intensity—the worst month in 25 years—reflects how thoroughly the AI narrative has come to dominate semiconductor valuations, leaving the sector vulnerable to any sign that spending growth may slow.
For investors tracking SanDisk and the broader semiconductor sector, the key question is whether this represents a healthy correction in stretched valuations or the beginning of a deeper downturn. The PHLX Semiconductor Index’s decline of more than 25% from June highs suggests that at least some of the excess has been wrung out, though sentiment remains fragile. SanDisk’s ongoing competition in memory chips adds another layer of pressure, while the broader semiconductor selloff continues to weigh on the entire sector.
Sources
- New York Times — Reported on July 28, 2026 that a global technology stock sell-off intensified on Tuesday, underpinned by worries over hefty bills for the build-out of artificial intelligence
- MarketWatch — Reported that the PHLX Semiconductor Index has tumbled 22.6% in July, on track for the biggest monthly decline since the record 33.6% drop in an earlier period
- Yahoo Finance — Reported that the PHLX Semiconductor Index briefly broke below 11,000 on Tuesday, now down over 25% from its June peak
- Forbes — Reported on July 8, 2026 that semiconductor stocks slid as Wall Street questions AI capex growth, erasing $1.3 trillion and putting Intel, Micron and AMD under pressure
- 247 Wall St — Reported that Samsung posted record revenue and profit, yet AI spending anxiety sent semiconductor stocks tumbling
