Western Digital shares plummeted 5.04% in intraday trading on Friday, extending a pre-market decline as the broader memory and storage sector faced a sharp sell-off.

The drop came after Morgan Stanley warned that the AI-driven storage rally is approaching an inflection point, with memory prices likely to peak in the fourth quarter. The cautious note triggered a wave of selling across the sector, with peers such as SanDisk, Seagate Technology, and Micron also trading lower.

Western Digital, a major player in the hard disk drive and NAND flash markets, was particularly vulnerable to the concerns over peaking memory prices, as investors reassessed growth expectations for the AI-fueled storage demand cycle.