--- title: "\"Blockbuster Earnings\" Become \"Sell-the-News Opportunity\": Sandisk and Western Digital Shares Plunge Post-Earnings" type: "News" locale: "en" url: "https://longbridge.com/en/news/284855519.md" description: "Sandisk's revenue surged 97% year-over-year, with its data center business tripling in a single quarter; Western Digital's revenue rose 45% year-over-year. Both companies' guidance significantly exceeded expectations, yet their after-hours stock prices fell by 6% and 8%, respectively. Analysts pointed out that against the backdrop of Western Digital's ~900% gain over the past year and Sandisk's ~3300% surge since its listing, the strong performance was already fully priced in. The guidance \"lacked sufficient surprise,\" triggering profit-taking in the market" datetime: "2026-05-01T01:11:24.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284855519.md) - [en](https://longbridge.com/en/news/284855519.md) - [zh-HK](https://longbridge.com/zh-HK/news/284855519.md) --- # "Blockbuster Earnings" Become "Sell-the-News Opportunity": Sandisk and Western Digital Shares Plunge Post-Earnings The better the earnings report, the harder the drop? On April 30 local time, U.S. storage giants Western Digital and Sandisk sequentially released their third-quarter fiscal results. Revenue, profits, and guidance all surpassed Wall Street expectations, accompanied by robust outlooks for the next quarter. However, the market's reaction was unexpected: both stocks plummeted in after-hours trading. Western Digital dropped as much as 8.2%, while Sandisk fell more than 6%. This trend is less a rejection of their performance and more a "reckoning" for prior gains. Analysts noted that given Western Digital's ~900% rise over the past year and Sandisk's ~3300% surge since its listing, the strong results were already fully priced in. The guidance "lacked sufficient surprise," triggering market profit-taking. ## How Strong Were the Earnings? Let's look at the numbers first. Sandisk's third-quarter revenue reached $5.95 billion, a staggering 97% year-over-year increase, far exceeding analysts' expectation of $4.7 billion. Adjusted earnings per share (EPS) came in at $23.41, nearly 1.6 times the analysts' forecast of $14.54. **Revenue from the data center business more than tripled year-over-year, reaching $1.47 billion for the quarter. Sandisk's net profit for the quarter hit $3.62 billion, compared to a loss of $1.93 billion in the same period a year ago—marking a complete turnaround to profitability.** Western Digital was equally impressive. Third-quarter revenue was $3.34 billion, up 45% year-over-year, beating the analysts' estimate of $3.25 billion; adjusted EPS was $2.72, higher than the expected $2.39; **net profit stood at $3.12 billion, compared to just $520 million in the same period last year.** In the earnings statement, Western Digital CEO Irving Tan stated, "The demand drivers are very clear: almost every AI workload—from training and inference to agent AI and physical AI—generates data that requires persistent, efficient storage on hard drives." He also announced a 20% increase in the quarterly dividend to $0.15 per share. Sandisk CEO David Goeckeler characterized the quarter as a turning point: "This quarter marks a fundamental inflection point for Sandisk—our technological leadership is driving our deliberate transition toward the highest-value end markets, led by our data center business." ## Guidance Remains Strong, But the Market Is "Not Satisfied" Following the earnings release, both companies provided next-quarter guidance that also exceeded expectations. Sandisk forecasts fourth-quarter revenue between $7.75 billion and $8.25 billion, with a midpoint of approximately $8 billion, significantly higher than the previously expected range of $6.49 billion to $6.62 billion. Adjusted EPS is projected to be between $30 and $33, also substantially surpassing analysts' expectations of $22.70 to $23.38. Western Digital expects fourth-quarter revenue to range from $3.55 billion to $3.75 billion, with adjusted EPS between $3.10 and $3.40, both above the analysts' estimates of $3.46 billion in revenue and $2.75 in EPS. With such strong guidance, why did the market sell off? ## After a 900% Rally, "Good" Is No Longer Enough There is a key context here. Data shows that Western Digital's stock price has accumulated a gain of approximately 900% over the past year. Since spinning off from Western Digital and listing independently in February 2025, Sandisk's stock price has skyrocketed from an issue price of $36 to around $1,063 in after-hours trading, a surge of approximately 3300%. Michael Ashley Schulman, partner at Cerity Partners, analyzed: **"The performance guidance from both companies failed to provide the 'wow factor' needed to sustain the current strong momentum."** In other words, these two stocks had long priced in the expectation of an "explosion in AI storage demand." When the earnings reports confirmed market expectations but failed to deliver a "surprise" beyond them, the pressure for profit-taking was released in concentration. Earlier this week, peer Seagate released strong performance forecasts, triggering a collective surge in storage stocks. Sandisk had already risen approximately 350% year-to-date, while Western Digital's yearly gain exceeded 150%. At such high levels, news that is "not stunning enough" can become a trigger for selling. ## No Doubt About AI Storage Demand Itself Notably, this stock price decline did not stem from doubts about fundamentals. According to Reuters, the performance and guidance from Sandisk, Western Digital, and Seagate jointly confirm that strong demand for storage products driven by AI data center construction continues. The growth rate of data storage demand from AI systems continues to outpace supply, allowing companies like Sandisk to continuously raise prices. Before the earnings release, Bank of America analyst Wamsi Mohan had pointed out that demand exceeding supply created a "favorable pricing environment." Western Digital CEO Irving Tan specifically mentioned that the company's gross margin for the quarter reached 50.5%, a significant improvement from a year ago. 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