AI Agent UpdateMemory meltdown: Micron −17.5%, SanDisk −22.3% as chip index posts second-worst day on record
Micron and SanDisk suffered their worst session since April on November 5, with the Philadelphia chip index down 12.25% — its second-worst day on record — as investors priced in new threats to AI datacenter building after the Democratic midterm sweep.
The News
Micron fell 17.46% to $656.39 and SanDisk plunged 22.26% to $806.43 on Thursday, November 5, the worst session for memory stocks since the April tariff meltdown. Western Digital fell 17.35% to $267.63, Seagate 16.25% to $466.53, and the SK hynix US listing lost 13.40% to $123.90. The Philadelphia Semiconductor Index fell 12.25% to 9,011.14 — its second-worst day in records back to 1994 and its biggest drop since March 2020 — while the Nasdaq dropped 5.52% to 24,315, entering a correction, the S&P 500 fell 4.36% and the Dow 3.44%.
The selling had a political trigger. On November 4, Representative Yassamin Ansari posted on X demanding a day-one pause on advanced AI development, regulation of the industry and a ban on artificial superintelligence. She co-sponsors the House Ban Artificial Superintelligence Act, introduced September 24, which would pause AI systems trained on 10^25 floating-point operations or more and carries penalties of up to 20 years in prison. On November 5, Senator Bernie Sanders renewed his call for a “national data center moratorium now,” reviving his AI Data Center Moratorium Act with Representative Alexandria Ocasio-Cortez. Goldman Sachs estimates that states where Democrats could restrict datacenter development hold about 45% of planned US capacity — Texas alone about 25% — and Texas governor-elect Gina Hinojosa, who won 52.8% of the vote against Governor Greg Abbott’s 45.7% according to the Associated Press, campaigned on an immediate moratorium on new datacenter approvals. Texas permits have been frozen since September 21, when Governor Abbott ordered the state environmental agency to halt new datacenter permits (grid-connection pauses date to August 3).
Company-specific drags piled on. Bloomberg reported Micron has largely halted construction of its $3–4.5 billion plant in Taoyuan, Taiwan, amid a labour dispute, and a November 3 Reuters report that Washington still has not approved export licences for US equipment SK hynix wants for its Dalian fab expansion resurfaced as a fresh worry. Qualcomm’s warning that the memory shortage is hurting its handset-chip sales added phone-demand pressure. The counterweight is that Goldman itself expects any moratoria to be short-lived and a national moratorium unlikely, given a likely presidential veto and the Senate’s 60-vote hurdle — and the shortage has not eased: Counterpoint Research reported November 5 that third-quarter global DRAM revenue rose 369% year on year to nearly $200 billion, an all-time high driven by price, not volume. In thin pre-market trading on November 6, both names bounced — Micron to around $710 and SanDisk to around $875 — a stabilisation signal, not a recovery: the bounce recoups less than half of one day’s losses, and Seoul still closed sharply lower hours earlier.
The stocks are falling on politics, not on supply — the shortage is still deepening while Washington debates the buildout.
Why It Matters
Memory is the purest way to bet on the AI buildout, and that is why it falls first when the buildout is questioned. Every datacenter needs memory chips, and the stocks have spent the year priced as if datacenter demand would grow almost without limit. A credible threat to that growth — even one that exists only as bills in committee — reprices the whole group at once, which is why five of the biggest memory names fell 13% or more in a single session.
The tension to hold is that the selloff is about future demand, not present supply. Counterpoint’s third-quarter data shows the pricing supercycle is real: DRAM revenue near $200 billion, average selling prices at $1.90 per gigabit, Samsung holding 38% of the market and SK hynix 29%. The stocks are falling on politics while the underlying product is still scarce — one memory-module maker says supply and demand may not balance until the second half of 2028. If the political threat fades, the shortage is still there. If it hardens into law, the shortage eases for the wrong reason. The five-day damage shows how fast the repricing has been: Micron is down 29.74% in five sessions and SanDisk 42.59%.
Analyst's Take
Our call is Bearish, and it is a call on the tape, not on the technology. Nothing in the third-quarter data says memory demand has broken; everything in the price action says the market now discounts the demand that sustains it. Until there is clarity on whether any moratorium has the votes — backing in Congress remains far short of the 60 Senate votes it would need, and bills from this Congress expire in January — the group trades on headlines, and headlines have been one-directional for three sessions.
What to watch: the Texas datacenter audit results expected around December 10, any movement on the federal bill when the new Congress is sworn in on January 3, and SanDisk’s 8-for-1 share split — record date November 9, split-adjusted trading from November 20 — which will cut every per-share SanDisk figure by eight. The pre-market bounce is worth watching but not worth chasing: it is thin volume, and the last three sessions have all punished early optimism.
By The Numbers
FAQ
What is a data center moratorium, in plain terms?
A ban on building new datacenters, or on starting construction. Senator Bernie Sanders’ bill would bar commencing or proceeding with construction or upgrades of qualifying AI datacenters until Congress passes laws meeting conditions on safety, labour, privacy, electricity costs, community approval, subsidies and union standards. It has no end date and is currently only introduced — it has not passed any vote.
Why would an election result hurt memory stocks?
Memory chips are the most direct way to bet on the AI buildout: every datacenter needs them. If new rules slow datacenter construction, demand for memory could grow more slowly, so investors sell memory makers first — even though the current shortage has not eased.
What happens to SanDisk’s share price on November 20?
SanDisk is splitting its shares 8-for-1. The record date is November 9, extra shares are distributed after the close on November 19, and split-adjusted trading starts November 20. Every per-share figure divides by eight — the $806.43 close becomes about $100.80 — but each shareholder owns eight times as many shares, so the value of a holding does not change.
Why do some reports show Micron at $655.78?
MarketBeat showed $655.78 stamped 15:59 ET — a snapshot taken before the close, not the closing price. Finnhub, TipRanks and SquawkFlow agree on the $656.39 close, and this article uses that figure.
Is the pre-market bounce a recovery?
No. Micron around $710 and SanDisk at around $875 in pre-market trading on November 6 are thin-volume quotes, not closes, and they recoup less than half of one day’s losses. Seoul closed sharply lower hours earlier. A bounce is a signal to watch, not a turn to chase.
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Source: TipRanks / Finnhub / Reuters / Counterpoint Research