AI momentum stocks retreat as earnings season sparks technology selloff

AI momentum stocks retreat as earnings season sparks technology selloff

Fiona Craig

Thu, August 6, 2026 at 1:39 PM GMT+3 2 min read

Technology shares linked to the artificial intelligence boom came under renewed pressure on Thursday, as another wave of corporate earnings prompted investors to take profits from some of the market's biggest winners.

The weakness spread across Asia before carrying into U.S. premarket trading, where several high-profile AI-related names extended recent declines.

Storage stocks lead premarket declines

Sandisk (NASDAQ:SNDK) dropped nearly 9% before the opening bell, even after forecasting first-quarter revenue above Wall Street's consensus estimate of $10.47 billion.

Western Digital (NASDAQ:WDC) performed even worse, falling more than 13% in premarket trading despite issuing sales guidance that also exceeded analysts' expectations. Fellow memory chip producer Micron (NASDAQ:MU) lost 3.8%.

The declines followed steep losses in SpaceX (NASDAQ:SPCX) and Advanced Micro Devices (NASDAQ:AMD), reinforcing concerns that the rapid gains enjoyed by AI-related stocks may have left valuations vulnerable during earnings season.

Investors lock in profits after massive rallies

The latest pullback reflects a classic "sell the news" response, particularly among stocks that have delivered exceptional gains this year.

Ahead of Thursday's session, Sandisk had climbed roughly 469% since the start of the year, while Western Digital had advanced around 201%.

By comparison, the Nasdaq Composite had risen approximately 13.4% over the same period, highlighting how strongly AI-related companies have outperformed the broader technology market and how elevated expectations have become.

Sandisk, which was spun off from Western Digital in 2025, quickly emerged as one of the market's leading AI momentum stocks as demand for NAND flash memory accelerated alongside the expansion of AI data centres.

Software names also come under pressure

Selling pressure was not limited to hardware companies. Software stocks also weakened before the U.S. market opened after disappointing earnings reactions elsewhere in the sector.

HubSpot (NYSE:HUBS) helped weigh on sentiment, while Salesforce (NYSE:CRM) declined 4.6%, ServiceNow (NYSE:NOW) fell 2.7%, Adobe (NASDAQ:ADBE) lost 2.6% and Intuit (NASDAQ:INTU) dropped 2% in premarket trading.

SpaceX stock price

Advanced Micro Devices stock price

SanDisk stock price

Western Digital stock price

Micron Technology stock price

HubSpot stock price

Salesforce stock price

ServiceNow stock price

Adobe stock price

Intuit stock price