SanDisk Corp. (NASDAQ:SNDK) shares are sliding Thursday along with other memory and storage chip stocks, as investors worry that climbing AI infrastructure costs will curb future spending and chip demand.
- SanDisk shares are retreating from recent levels. What’s pressuring SNDK stock?
SanDisk Stock Falls On AI Spending Concerns
Memory and storage chip stocks are losing ground, and SanDisk is one of them. Investors fear that AI infrastructure is getting so costly that customers could slow their spending, which would cut demand for chips.
Nvidia CEO Jensen Huang added to the unease Thursday by saying capital is scarce for funding AI expansion. His remarks deepen doubts that AI investment can keep growing.
Huang described a mismatch: neocloud demand is extraordinary, but money to expand is short. He spoke with CNBC at Nvidia’s GTC conference in Berlin on Thursday.
Working capital is the missing piece, Huang said, and the many AI sectors competing for funds have created a “scarcity of capital.” Requests for money far outstrip what exists, he said, but he expects the gap to close.
Credit Investors Warn On AI Financing Costs
Credit markets show the same worry, according to Bloomberg. Financing AI infrastructure is getting pricier, investors say, and a surge of new debt is on the way.
Grant Nachman, founder and chief investment officer of Shorecliff Asset Management, said today’s market could make large unsecured loans to neocloud providers unaffordable or hard to land.
MetLife Investment Management’s John Yovanovic, co-head of leveraged finance, points to the debt supply expected over the next 18 months as the bigger problem. Companies that keep accepting rising borrowing costs risk hurting existing bondholders, he said, and buyers may wait for yields to climb before stepping in.
SNDK Shares Are Tumbling
SNDK Price Action: SanDisk shares were down 9.30% at $1250.03 at the time of publication on Thursday, according to Benzinga Pro.
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