SanDisk and Western Digital Shares Plunge Despite Strong Earnings Forecasts

SanDisk’s stock fell 13.3% to about $1,178, while Western Digital dropped 19.1% to roughly $420, putting the latter on track for its steepest one-day decline since April 2025. The slide came after both companies reported quarterly revenue forecasts that beat analyst estimates compiled by LSEG but fell short of broader market expectations. The reaction highlights the high bar set for semiconductor firms that have been labeled “AI favorites” after sizable gains this year.

Reuters

Both firms have benefited from a global shortage of high-end memory chips, which has driven chip prices upward and lifted the Philadelphia Semiconductor Index about 70% and the S&P 500 about 12.8% this year. SanDisk’s shares have risen more than fivefold, and Western Digital’s have more than tripled, as investors bet on data-center and AI-related demand.

Reuters

• SanDisk forecast first-quarter revenue of $10.3 billion to $10.8 billion.

Reuters

• Western Digital projected Q1 revenue of $4.1 billion, plus or minus $100 million.

Reuters

• Revenue from SanDisk’s data-center business grew over 400% in 2026 versus 2025, doubling in the fourth quarter compared with the third.

Reuters

Other chip makers also slipped: Seagate fell 6.8%, Micron declined 7%, SK Hynix slid 8.5%, Intel dropped 4.7%, AMD was off 1.4%, and Marvell lost 3.6%.

Reuters

“The recent volatility in semiconductor stocks appears disconnected from any material change in long-term fundamentals,” — Divya Mathur, a portfolio manager at ClearBridge Investments

Reuters

Analysts still expect data-center demand to sustain growth for memory and storage firms, but the sharp price corrections indicate that investors are quick to penalize any hint that AI-driven expansion could normalize. The episode underscores the delicate balance between strong earnings, lofty expectations, and market sentiment in a sector that has become a focal point of the broader AI spending surge.

Reuters