A broad selloff hit AI-linked hardware and chip stocks on Wednesday as investors locked in gains from a months-long rally and questioned how long red-hot demand for AI infrastructure can support current valuations.
Dell Technologies Inc (NASDAQ:DELL) fell as much as 12%, touching a session low of $397.69, after a report that Meta Platforms is developing plans to lease out surplus AI training and inference capacity to enterprise customers. The news stoked concern that hyperscale cloud providers may have over-built data center infrastructure, a development that could slow future server orders for system integrators such as Dell.
Rising memory costs added to the pressure on Dell’s margins, given that AI-optimized servers already carry lower gross margins than the company’s traditional hardware lines. GF Securities recently downgraded the stock to “Hold” from “Buy,” citing a stretched valuation after shares had rallied roughly 200% and traded near 34 times forward earnings. Extensive insider selling, totaling about $1.56 billion over three months with no offsetting purchases, has also weighed on sentiment.
Micron Technology Inc (NASDAQ:MU) dropped about 9%, extending losses as investors weighed reports that Washington is considering tighter unilateral restrictions on exports of high-bandwidth memory products, a step that would carry direct implications for the chipmaker’s international revenue. Competition from Chinese memory manufacturers has also been cited as a growing longer-term threat to Micron’s pricing power.
SanDisk (NASDAQ:SNDK) shares slid sharply after a research firm cut its near-term outlook for the NAND flash market, pointing to average selling prices falling faster than previously expected. That shift reinforced concern that the memory industry’s supply-demand balance is tipping toward a surplus as capacity expansions across the sector outpace demand from enterprise and consumer electronics customers.
Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD) shares also fell, caught up in the broader retreat across semiconductor and memory names. The stock has been especially sensitive to swings in sentiment after more than doubling year-to-date on optimism around its EPYC server processors and Instinct AI accelerators, leaving it vulnerable to profit-taking once the mood in AI hardware shifted.
The declines mark the latest bout of volatility in a sector that has posted extraordinary gains through 2026 on the back of surging AI infrastructure spending. Traders and analysts described Wednesday’s moves largely as a valuation reset rather than a sign of a broader breakdown in AI demand, though the Meta capacity report and renewed scrutiny of hardware margins have added a fresh layer of uncertainty heading into the next round of quarterly earnings.