GIGADEVICE's stock plummeted 8.10% during intraday trading on Tuesday, continuing a recent correction trend for the semiconductor company.

The sharp decline comes amid dual headwinds facing the storage chip sector. Market concerns have intensified over potential AI computing power oversupply, particularly after Meta's announcement of plans to launch a cloud infrastructure business and sell surplus AI computing resources. This development has been interpreted as a signal that AI capital expenditure may have peaked, triggering sell-offs across the global computing power supply chain.

Additionally, GIGADEVICE faces pressure from its elevated valuation, with the company's trailing P/E ratio standing at 200x—significantly above the industry average of 128x. The company has issued risk warnings noting that storage chip prices are at historical highs, and with niche storage market capacity marginally increasing, prices may decline considerably in the near future.