Roundhill Memory ETF (DRAM) experienced a significant pre-market plunge of 5.10% on Thursday, as the fund tracking memory and storage companies was caught in a broad sector-wide sell-off.

The sharp decline was primarily triggered by market fears of a potential inflection point in AI computing power supply. Reports that Meta Platforms plans to sell excess AI computing capacity from its data centers sparked concerns of oversupply, leading investors to worry that capital expenditure by major tech firms on AI infrastructure may have peaked. This news resulted in heavy selling pressure on semiconductor and memory chip stocks globally, with key holdings of the ETF like Micron Technology and SanDisk both plunging over 10% in the previous session.

Compounding the negative sentiment, memory chip giants Samsung, SK Hynix, and Micron are facing a class-action lawsuit in U.S. federal court alleging coordinated DRAM price manipulation since 2022. Given that these three companies constitute over 74% of the Roundhill Memory ETF's weighting, the legal concerns directly contributed to the fund's net asset value decline amid the broader sector downturn.