GIGADEVICE's stock plummeted 13.22% during intraday trading on Thursday, marking a significant decline for the memory chip manufacturer.

The sharp drop followed market concerns that capital expenditure on AI infrastructure by major technology companies may have reached its peak. Reports indicate that Meta is formulating plans to launch a cloud infrastructure business to sell AI computing power and model access, which investors interpreted as a sign that the intense investment cycle in AI hardware could be slowing. This raised fears that high-performance memory and computing chips, which have faced supply bottlenecks, might soon encounter a situation of oversupply.

Adding to the negative sentiment, GIGADEVICE issued an announcement warning that as major memory manufacturers re-enter the niche memory market, niche memory products could face the risk of price declines in the future. While analysts at Morgan Stanley noted this warning pertains to potential industry risks in the coming years rather than an immediate issue, and maintained their overweight rating, the combined factors contributed to the stock's significant intraday decline.