The Nasdaq Correction Cost $2.5 Trillion in October and Broke the Memory Trade on Thursday

The Nasdaq 100 closed in correction on Monday, at 27,989.82, down 10.4% from its record close on October 6. The Nasdaq Composite followed on Thursday, falling 5.3% in a day to 11% below that same record. The sharpest losses landed on the stocks selling the one thing whose price keeps rising: memory.

TrendForce expects conventional DRAM contract prices to rise 10% to 15% in the fourth quarter, and NAND flash 15% to 20%, after a third quarter in which DRAM rose 13% to 18% and a second in which it rose 58% to 63%. Nikkei puts DRAM prices at roughly twice their level at the end of 2025. The stocks went the other way. Micron fell 7% on Wednesday and about 14% on Thursday, a five-day fall of 30%; SanDisk fell 7.9% on Wednesday and 17.8% on Thursday, down 26.2% across five sessions; SK Hynix fell 9.46% in Seoul, Samsung 7.57%, and the KOSPI closed down 5.28% at 5,383.80.

Apple is the buyer paying those memory prices, and its new chief executive said so on Monday, on his first earnings call. “What we’re seeing with memory pricing right now is unprecedented,” John Ternus said, adding that Apple expects “even higher memory costs” in the December quarter and prices “continuing to increase” beyond it. Apple’s gross margin was 47.9% in the September quarter and is guided to 45% to 46% for December; its manufacturing purchase obligations rose $33 billion in a quarter, to $89.7 billion, and its inventories are about two and a half times what they were a year ago, at $14.5 billion. Apple shares fell about 4% on Tuesday.

The Philadelphia Semiconductor Index fell 7.2% on Friday, October 30, then 3.35% on Monday, to its lowest since April 29, and it is about 29% below its June record. Chip stocks lost more than $400 billion in value in Monday’s session alone, and about $3.7 trillion since October 6. Wednesday interrupted the slide with a rally, the Dow up 3.03%, its best post-midterm-election day in 44 years, the VIX down 20% to 16.61, and Thursday took it back. The VIX rose 47% to 24.44, its highest since April 7, and the Nasdaq gave back all of Wednesday’s gains.

Governor-elect Gina Hinojosa promised, in a video on October 22, that “when I am governor I will issue a moratorium — a ban — on all data center approvals until laws can be passed by the Legislature to protect Texans.” Texas holds about 27% of the data-centre capacity planned in the United States, and Georgia elected a governor who campaigned on the same pause, while voters sided against data centres in 40 of 41 local measures. The moratorium is not yet in force, and the freeze it would replace is already running. Hinojosa takes office on January 19, and the approvals are already frozen: Governor Greg Abbott ordered an audit of every data centre in the grid queue on August 3, more than 1,800 projects, and told the state environmental agency on September 21 to issue no permits until it ends. The audit’s reports are due December 10.

Microsoft sold $25 billion of bonds on October 29, its first bond sale since 2017, drawing $115 billion of orders. Oracle sold $10 billion on Monday, at 2.40 to 3.35 points over Treasuries, alongside about $9.9 billion of stock, and has committed to just $10 billion of gross debt growth through fiscal 2030. Alphabet raised €6 billion in euro debt on Monday, and Meta is eyeing at least $20 billion, all of it raised to fund AI spending. The spreads put a price on the difference. Oracle’s shortest new bond pays 7.0%, while Microsoft’s longest, a 40-year note due in 2066, pays 6.35%. Hyperscalers and data-centre developers have raised more than $313 billion in investment-grade bonds this year, almost three times the whole of 2025.

u/i_am_mr_blue, on Reddit’s r/stocks daily thread, wrote that “Costco walmart trades at 40+ PE and meory stocks are getting destroyed with <10 PE. Makes sense." u/Skilledthunder wrote that memory "looks severely coiled here," that "multiples are pricing in a full-blown pricing crash that hasn't materialized," and that there is "legitimate 2x (or even 3x) upside from here," then ended the same comment with "No way im touching it though." u/fakemedicines wrote, "Normally I am pretty calm when things tank but this is starting to feel kinda spooky." u/BoredPoopless wrote four words: "Idc I'm buying NVDA."

Ipek Ozkardeskaya, at Swissquote, said there was now a chance the Trump government’s “extra push” for the AI buildout “will somehow be scaled back,” and that “we suspect there is going to be some scrutiny on this aggressive AI buildout.” Representative Yassamin Ansari called for “a pause on advanced AI development” as the Democrats’ first-day business, and Dan Ives, at Wedbush, said Democratic control would create “major hurdles for AI and tech legislation in the Beltway over the next 2 years.” Daniel Newman, at Futurum, answered that “if the build slows in the U.S. the demand outside the U.S. is more than sufficient” and that “forecasts remain intact.” Han Ji-young, at Kiwoom Securities, said data-centre projects already under way were unlikely to face major delays, leaving existing supply contracts and earnings forecasts largely intact.

Five of the 11 S&P 500 sectors were down on Thursday and energy gained the most, and the Dow fell 0.66% in the morning while the Nasdaq fell 3.09%. Qualcomm fell 9% on its own numbers, handset sales down 26% in a year to $5.14 billion, and Snap fell 12% on a revenue miss while AppLovin rose 32% on a profit beat. The analysts have not moved. Micron is still a Strong Buy with an average target of $1,621.67, more than double its $795.23 close, and SanDisk a Buy with a $2,080.59 target.

This Nasdaq correction is the Nasdaq 100’s third of the year. The first two, in March and in July, both ended in new records, and the index is still up about 10% on the year. Jon Erlichman, posting a video on Wednesday, put the average one-year return after a Nasdaq 100 fall of 10% or more, over the past ten years, at 25.8%, the worst of the seven cases he listed 7.9% and the best 53%. The Nasdaq shed more than $2.5 trillion in market value in October.

In the morning session, the S&P 500 posted 69 new 52-week highs against 3 new lows. The Nasdaq posted 132 new highs and 247 new lows.