Memory stocks got torched Tuesday, and one veteran money manager has a warning for anyone who bought the run-up: what goes up that fast can come down just as fast.

Silvant Capital Management CIO Michael Sansoterra told CNBC that the memory complex had gone “hyperbolic,” and that violent moves cut both ways. He pointed to Micron Technology Inc. (NASDAQ:MU), which he said had re-rated from roughly 5 times earnings to 10 times during its run.

The selloff was brutal.

Micron fell 13% after a near-10% plunge in South Korea’s KOSPI hammered memory names Samsung and SK Hynix overnight, dragging the sector into Wednesday’s earnings print.

The wider AI trade felt it too. The VanEck Semiconductor ETF (NASDAQ:SMH) dropped more than 6% and NVIDIA Corp. (NASDAQ:NVDA) shed about 3%.

Why Sansoterra Is Not Calling A Top

Sansoterra said memory demand is real and outstripping supply, pricing remains strong, and AI will keep driving the space for years. He expects Micron to post a strong quarter with good guidance.

After a stock more than doubles in months, he said, even a good print may not be enough to make traders happy.

He pointed to forced money movement as well.

Large index weights are set to change at the end of the week, particularly in large-cap growth, pushing big money around quickly.

He also tied the volatility to profit-taking, as investors free up capital for a wave of major liquidity events including the recent SpaceX IPO and the anticipated arrivals of Anthropic and OpenAI.

For investors bracing for more of these moves, Sansoterra had blunt advice. “You do need to gird your loins a little bit here,” he said.

What Prediction Markets Say About Micron Earnings

On Polymarket, traders give Micron a 96% chance of beating earnings, which arrive tomorrow after the bell.

Micron is currently trading at $1,068, but Polymarket gives an 85% chance that the stock touches $1,050 this week. The probability of a rally back to $1,230 is priced at 43%.

The market is betting on a beat and a lower price at once, and that pattern would not be new. Micron has topped both earnings and revenue estimates for eight straight quarters and still closed lower the next day in six of them.

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