The tech sector recently experienced a wave of volatility as several heavy hitters saw their share prices slide following their latest earnings reports. On a recent episode of The Morning Filter podcast, Morningstar Chief US Market Strategist Dave Sekera joined host Susan Dziubinski to analyze whether these dips represent buying opportunities or warning signs for cautious investors. While the sell-offs may seem alarming at first glance, Sekera suggests that the underlying reasons for the movement vary significantly depending on the company’s role in the current artificial intelligence boom.
Advanced Micro Devices found itself in the crosshairs with a seven percent drop after reporting results that actually beat consensus expectations. Despite a massive fifty percent jump in year-over-year revenue and explosive growth in server CPUs driven by AI workloads, the market seemed preoccupied with how long such breakneck speed can be maintained. Sekera notes that while AMD remains fundamentally strong with new products like the Helios AI solution rack on the horizon, the window for easy gains has closed. Having rocketed hundreds of percent since early 2025, AMD has transitioned from a screaming buy to more of a hold, though it currently trades at a slight discount to its estimated fair value.
The situation is more precarious for storage giants SanDisk and Western Digital, both of which suffered double-digit losses following their updates. Like AMD, these companies are riding a wave of extreme demand caused by AI infrastructure needs, allowing them to command high margins during a period of supply shortages. However, Sekera warns that these businesses operate more like commodities, making them susceptible to sudden shifts when supply eventually catches up or demand fades. With forecasts suggesting a potential peak by early 2028 followed by a downturn shortly after, predicting their precise value is an exercise in guesswork.
Even though SanDisk and Western Digital have plummeted forty percent or more from their June peaks, bringing them back into certain valuation ranges, Sekera remains skeptical. He argues that negative momentum combined with high growth expectations already baked into the price makes these stocks risky bets despite the deep discounts. For investors eyeing the rubble of recent tech pullbacks, the takeaway is clear: not every dip is a deal, and distinguishing between temporary profit taking and structural risk is essential in today’s volatile AI landscape.
