This article first appeared on GuruFocus.
Micron Technology Inc. (MU, Financials), the memory-chip maker, fell in premarket trading as Sandisk’s latest outlook raised new questions about what is driving the industry’s rapid growth.
Sandisk delivered stronger-than-expected quarterly revenue and earnings, but its forward guidance failed to clear the high bar created by the memory sector’s enormous rally.
Management said roughly two-thirds of Sandisk’s recent revenue growth came from higher prices, while only one-third came from increased shipment volumes. That distinction matters because pricing gains may become harder to sustain if supply improves or demand weakens.
Consumer memory revenue also fell 32% sequentially to $556 million. Sandisk expects personal-computer and smartphone shipments to decline by a mid-teen percentage this year, highlighting weakness outside AI data centers.
The concerns spread across the sector. Micron fell more than 3%, while Western Digital, SK Hynix and Samsung also declined sharply.
Investors will watch Micron’s shipment growth and pricing commentary for evidence that AI demand can keep supporting the rally without relying mainly on higher prices.
