Western Digital (WDC) shares tumbled 5.09% in the 24-hour period ending Wednesday morning, as the stock extended a sharp decline that saw it drop nearly 7% during Tuesday’s regular trading session. The plunge occurred amid a broader semiconductor sector rout, with the Philadelphia Semiconductor Index falling over 4% and memory-focused ETFs hitting multi-month lows.

The selloff was driven by mounting concerns over NAND flash memory pricing, as signs of oversupply from major competitors threatened to erode average selling prices. Investor sentiment was further rattled by the initial public offering of Chinese memory-chip maker CXMT, which surged to become the most valuable company listed in mainland China, intensifying fears of heightened competition in the global memory market. Additionally, growing skepticism about the returns on massive AI infrastructure spending by hyperscale cloud providers weighed heavily on the sector, with analysts noting that investors are increasingly demanding clear progress on investment returns before rewarding further AI-related capital outlays.

Western Digital also faces company-specific headwinds, including uncertainty surrounding the planned separation of its HDD and Flash business units and concerns about a potential slowdown in the enterprise storage refresh cycle. These factors combined to push the stock sharply lower, despite a brief after-hours rebound attempt following stronger-than-expected earnings from peer Seagate Technology.