Micron and Sandisk valuation multiples are unbelievable as chip stocks get crushed
Chip stocks are getting crushed, especially these two former highfliers.
You don't have to look that far to grasp the severity of the increasingly painful chip stock sell-off .
Just start with the two names that were (keyword: were) the leaders of the AI-fueled momentum for much of 2026: Sandisk ( SNDK ) and Micron ( MU ).
Micron stock crashed 14% on Thursday, bringing its one-month plunge to a startling 36%.
The rout has brought Micron's forward price-to-earnings (P/E) ratio down an almost laughable 4.8 times, according to Yahoo Finance AlphaSpace data. Keep in mind Micron is coming off a quarter of strong demand amid memory chip shortages driving up prices.
The Street still expects Micron to grow earnings by at least 17% in its next fiscal year.
Sandisk is in the same valuation boat as Micron, trading at about 4.9 times estimated forward earnings on a P/E basis. Similar to Sandisk, its business has been very strong, and the Street remains bullish on its profit outlook.
Sandisk stock is down 19% today, bringing its one-month drop to 29%.
For perspective here, the S&P 500 ( ^GSPC ) trades at about 18.5 times estimated forward earnings.
The bottom line appears to be this: The market couldn't care less about the valuations on either former AI momentum darling. The prevailing view is that, with Democrats taking control of the House and Senate and victories in key governor races, the construction of new data centers will be slowed.
That could mean fewer orders for Micron and Sandisk and a reassessment of their longer-term earnings power.
In other words, each is likely a value trap — until the dust settles on the AI trade.
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