Hot chip stocks like Micron (MU) and Sandisk (SNDK) are taking it on the chin out of the gate this week.
Ask the world’s richest person, Tesla and SpaceX CEO Elon Musk, and he will probably say the sell-off is just beginning.
“When China figures out how to manufacture a product, their ability to scale is often greater than the rest of the world combined. We saw this with lithium batteries and solar, for example,” Musk said in a new post on X.
Musk was replying to a post about the fresh chip stock sell-off, which is being fueled by Chinese tech player CXMT. The company’s president, Cao Kanyu, called out “key progress” on a new cell architecture at an event in Shanghai over the weekend.
Elon Musk departs after a welcome ceremony with President Donald Trump and China’s President Xi Jinping at the Great Hall of the People, May 14, 2026, in Beijing. (AP Photo/Mark Schiefelbein, File) ยท AP Photo/Mark Schiefelbein
CXMT plans to roll out new memory products based on the architecture by the end of the year.
The development sparked concern that growing Chinese competition could threaten memory chip pricing power, causing investors to unwind crowded momentum AI trades.
Micron shed 3.8% in Monday’s trading session and is down another 4% in premarket trading today. Sandisk lost 5.9% on Monday and is off by 5% today.
Sharp sell-offs are also being seen in other memory names, including SK Hynix (SKHY), Western Digital (WDC), and Seagate (STX).
Added Musk, “SpaceX is a rare counter-example, where its mass to orbit is roughly an order of magnitude greater than the rest of the world, BUT China now does the majority of non-SpaceX mass to orbit. SpaceX is an anomaly in the matrix. Maybe RAM will be different, but RAM was a low margin commodity only ~3 years ago. LP5 and LP6 are designed to a common standard that China seems to be solving fast.”
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Sozzi Unleashed morning show, the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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