Shares of data storage and memory chip companies slid in premarket trading after Japanese competitor Kioxia Holdings reported a steep drop in profit. SanDisk down over 7%; Seagate Tech, Western Digital down over 4%; Rambus, Pure Storage down over 2%.

Kioxia posted adjusted net income of 41.7 billion yen—about $284 million—for its fiscal second quarter, down more than 60% from the year before. The company faced a double-whammy of declining revenue and growing costs.

Kioxia stock fell 1.6% in Tokyo trading Thursday, bringing its overseas peers down with it. Seagate and Western Digital, which specialize in hard disk drives, were down 6.1% and 6.4%, respectively. Micron, which makes flash and random-access memory chips, was down 1.5%.

The broader data and memory hardware industry has been on a tear in 2025, with investments in artificial intelligence and cloud computing driving an unexpected surge in demand. Western Digital is the top performer in the S&P 500 this year as of Wednesday’s close, having climbed 269%, while Seagate and Micron rank third and fourth.

Investors will have to decide whether Kioxia’s disappointing report is an aberration or a sign of troubles ahead. Given the small declines relative to these stocks’ triple-digit percentage gains this year, Wall Street doesn’t seem too concerned just yet.

Western Digital and Seagate beat heightened expectations in their most recent earnings prints. Micron reports earnings for the November quarter next month.