On Friday, the storage sector continued its decline from the previous session, facing broad-based selling pressure.

SanDisk Corp. (SNDK) and Western Digital (WDC) saw their shares fall by over 7%, while Micron Technology (MU) dropped more than 6% and Seagate Technology PLC (STX) declined over 5%.

The primary catalyst for this pullback in storage stocks was the latest earnings report from Broadcom (AVGO).

Following its earnings release on June 4, Broadcom did not raise its AI chip sales forecast for the 2026 fiscal year, disappointing the high market expectations that had previously driven chip stocks higher.

This disappointment triggered a sharp sell-off, with Broadcom's stock plummeting over 12% in a single day, and the negative sentiment quickly spread across the broader semiconductor sector, hitting storage-related stocks particularly hard.

Furthermore, the consecutive days of selling indicate that with AI-related stock valuations at elevated levels, market sensitivity to AI performance guidance has increased significantly.

Any signal that fails to exceed expectations can trigger profit-taking.

In terms of sector rotation, the Dow Jones Industrial Average defied the broader market trend on June 4, surging 1.73% to reach a new all-time high.

Sectors that had previously lagged, such as healthcare and financials, became safe havens for capital, further diverting liquidity away from technology stocks.