Technology stocks started the week with panicking sentiment. Shares of SanDisk (SNDK) lost 11.02% on Monday to close at $1,278.23. It is now down an astounding 45.71% from the $2,354.39 high recorded in late June.
SNDK stock trades at a forward P/E of 6.2 times. This multiple, however, depends on the company meeting analyst earnings targets in the next year. Markets are nervous about South Korea’s weak chip sector. SK Hynix (SKHY) lost 7.47% to close at $143.02, a new low. Micron (MU) traded at around $900, while Seagate (STX) and Western Digital (WDC) also pulled back.
MaxLinear (MXL) dropped by 9.4%, extending its loss to around 22% post-earnings. The firm posted a 55% Y/Y revenue growth, to $168.8 million. MXL stock still returned 272.12% YTD, so only the recent investors need to worry about growing paper losses.
NVIDIA (NVDA) announced a huge $500 billion partnership with SK Group. It will collaborate on building a 2-gigawatt-scale AI Cloud in South Korea. NVDA stock dropped by 4.99%. As the leader of the AI boom, the negative reaction should spook bullish investors. Markets also sold AMD shares (-5.17% on Monday).
The Bottom Line
Traders continued to rotate out of the red-hot semiconductor sector. They want to realize the triple-digit percentage gains they earned this year.
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