SanDisk Corp. (SNDK) shares took a significant hit in Thursday's trading session, plummeting 5.08% as the memory chip and data storage sector faced widespread pressure. The sharp decline was primarily triggered by disappointing financial results from Japanese competitor Kioxia Holdings, sending shockwaves through the industry.

Kioxia reported a steep 60% drop in adjusted net income for its fiscal second quarter, with revenue declining and costs increasing. This poor performance had a domino effect on U.S. memory chipmakers, with Western Digital and Seagate Technology also experiencing notable declines of over 4%. The broader impact extended to other players in the space, including Micron Technology and Pure Storage, which saw their shares fall as well.

While the tech sector has been riding high in 2025, with significant gains driven by investments in artificial intelligence and cloud computing, this setback raises questions about the sustainability of the memory chip market's growth. Analysts suggest that concerns over demand and pricing pressures are contributing to the selloff. As SanDisk and its peers navigate these challenging market conditions, investors will be closely monitoring the sector for signs of stabilization or improvement in the coming weeks.