【US Pre-Market】Memory Chip Stocks Tumble as AI Capital Spending Concerns Rise; Western Digital Falls Over 16%, SanDisk Drops Over 10%

TradingKey - On Thursday (August 6) Eastern Time, the three major US stock index futures were mixed in premarket trading. Dow and S&P 500 futures rose slightly, but Nasdaq 100 futures were under pressure, as the market continued to digest pullback pressures following AI capital expenditures, chip stock valuations, and earnings reports from the storage sector. Investors are also awaiting initial jobless claims, Q2 nonfarm productivity, and unit labor costs data to gauge the latest changes in US employment and inflationary pressures.

As of press time, Dow futures rose 0.28%, S&P 500 futures rose 0.18%, and Nasdaq 100 futures fell 0.38%.

Performance of the three major US stock index futures, Source: Investing

In commodities, gold ( XAUUSD) rose about 0.5% to around $4,268; international oil prices rebounded slightly, with WTI ( USOIL) crude rising about 1.12% to around $75.9, and Brent crude rising about 1.1% to around $80.3. The market continued to monitor the progress of US-Iran negotiations and the reopening of the Strait of Hormuz, with oil prices temporarily stabilizing after a sharp decline in the previous period.

In cryptocurrencies, Bitcoin ( BTC) fluctuated around $64,600, down slightly by 0.1% on the day. Although weakening Nasdaq futures showed that risk appetite for tech stocks remains unstable, expectations of easing tensions in the Middle East and improved ETF inflows have helped crypto assets maintain a moderate rebound.

Market Moves

Storage stocks collectively under pressure premarket. Western Digital ( WDC) fell over 16% premarket. The company's fourth-fiscal-quarter adjusted earnings per share were $3.56, higher than the market expectation of $3.31; revenue grew to $3.75 billion, also slightly beating expectations. However, its revenue and margin guidance for the next quarter were only slightly above market expectations, failing to meet the high expectations of the AI storage trade. SanDisk ( SNDK) fell over 10%, Seagate Technology ( STX) fell over 5%, Micron Technology ( MU) fell over 4%.

AMD ( AMD) fell nearly 1% premarket. The company's second-quarter revenue was $11.5 billion, slightly above market expectations, with data center revenue doubling year-over-year to $6.7 billion. However, the market remains cautious about the competitiveness of its AI accelerators, gross margin guidance, and the gap with Nvidia. Previously, SpaceX ( SPCX) stated it would prioritize the use of Nvidia chips, which also added to the pressure on AMD's stock price.

Nvidia ( NVDA) rose slightly premarket. Earlier, Elon Musk expressed support for Nvidia's Vera Rubin architecture during SpaceX's earnings call, stating that SpaceX would expand its procurement of Nvidia GPUs. This news reinforced market expectations for Nvidia's AI computing orders, but against the backdrop of overall weakness in chip stocks, the premarket gains were limited.

AppLovin ( APP) fell over 19% premarket. The company's second-quarter revenue grew 53% year-over-year to $1.92 billion, and its earnings per share of $3.76 were basically in line with market expectations, but revenue slightly missed expectations, and its third-quarter revenue and adjusted EBITDA guidance were also below Wall Street estimates. The company stated that the pace of its AI model upgrades affected short-term performance, while advertising demand remains strong.

Market Highlights

Global chip stocks are under pressure, with the South Korean market falling sharply. South Korea's KOSPI Index fell 4.58% on Thursday, with SK Hynix down over 10% and Samsung Electronics down over 6%. The pullback in Asian chip stocks extended into US premarket trading, as stocks related to memory, AI servers, and semiconductor equipment were all pressured by high valuations and profit-taking.

Negotiations over the Strait of Hormuz continue to influence oil prices. The market is focusing on the progress of talks among the US, Iran, and Oman regarding the reopening of the Strait of Hormuz. Oil prices rebounded slightly after falling earlier, but remain significantly below levels seen during the peak of the Middle East conflict.

The US will release employment and productivity data today. At 8:30 AM ET, the US will release initial jobless claims, continuing jobless claims, second-quarter nonfarm productivity, and unit labor costs. The market expects initial jobless claims to be 203,000 and second-quarter unit labor costs to grow 2.2% quarter-on-quarter.

The expiration of SpaceX's lock-up period has drawn market attention. SpaceX previously plunged due to a surge in AI capital expenditure, and the market is also focusing on the impact of the post-IPO unlock of certain insider shares on short-term supply and stock price volatility.

Major Data and Events Preview

At 8:30 AM ET on August 6, the US will release initial jobless claims, continuing jobless claims, second-quarter nonfarm productivity, and unit labor costs.

At 10:00 AM ET on August 6, the US will release June wholesale inventories and wholesale sales data.