Western Digital

Today’s main event is August non-farm payrolls rose triple to 162,000.

SanDisk, Micron Tech, Nvidia, Marvell, Ciena, and Hua Hong Grace shares increase.

Good news on US-mediated Russia-Ukraine peace talks are set to resume.

Hope other companies can do well.

$Seagate Tech(STX.US)

🤔 Is Seagate (STX) Too Pricey to Buy Now?

I came across a post about Seagate and decided to dig deeper as I am always on the hunt for value stocks!

Here is what I found:

🔷The Turnaround Story Is Impressive

1️⃣ FY2026 revenue: US$12.2B

2️⃣ Gross margin surged from 32.9% → 52.3% in just 8 quarters 🚀

3️⃣ Free cash flow: ~US$3.1B ✅

But the Stock Has Rerated Hard and I realise that there is NO Margin of Safety ⚠️

At US$798.61, Seagate trades at 56x trailing P/E and 23.3x forward P/E.

There is effectively no margin of safety here. A margin of safety means buying at a discount to intrinsic value to protect you if things go slightly wrong, no buffer to protect you. The current share price already assumes perfect execution.

🔷 Compared to peers:

• Western Digital: 22.7x forward P/E

• Micron: 13.2x

• SanDisk: 7.1x

• Seagate: 23.3x — 🏆 the highest of the group!

On EV/Operating Income, the gap is even clearer:

Seagate at 42.8x 🏆 ,

Western Digital at 34.3x

Micron and SanDisk at just 17.9x.

So yes, Seagate is trading at a clear premium and that premium leaves no room for error.😔

🔷 The Big Question: Can Earnings Justify the Price?

The market is already pricing in a strong FY2027. The consensus EPS is around US$34.33. If EPS reaches US$38–41.50, the valuation becomes more reasonable.

But here’s the risk: because there’s no margin of safety, any earnings miss has an oversized impact.

Currently, STX is down 30% from June’s US$1,144 peak. It looks cheaper than before but it is not exactly cheap based on the valuation ratio compare to peers.

Great business momentum but expensive valuation with very high expectations already built in plus and no margin of safety to fall back on.

Would you buy STX at US$798 or wait for a better entry point that offers a real margin of safety? 👇

Not financial advice. Do your own DD.

$Western Digital(WDC.US)

Context:

AI is creating an enormous amount of data, and all of that data ultimately needs to be stored. As hyperscale data centers continue to expand, I believe high-capacity HDD demand has a durable runway. With WDC now a pure-play HDD company, the thesis is cleaner and more directly tied to that structural growth.

My Trade:

I’m long WDC and simply holding my position. I’m not adding or trimming based on short-term price action. As long as cloud demand remains strong and the underlying business continues to execute, I see no reason to interfere with the position.

Takeaway:

Not every investment needs constant action. When the thesis is working and the fundamentals continue to move in the right direction, sometimes the best decision is to do nothing and give the business time to create value.

Context

Following its historic 2025 spin-off from Western Digital into a pure-play enterprise flash storage innovator, SanDisk Corporation $Sandisk(SNDK.US) has ridden an unprecedented wave of AI-driven infrastructure demand. The company recently reported block-buster fiscal fourth-quarter results, with revenue skyrocketing 372% year-over-year to $8.97 billion and non-GAAP gross margins hitting a record 84.6%. However, Wall Street aggressively penalized the stock, triggering a 35.5% drawdown from its June peak of $2,354. This panic stems from a slightly softer-than-expected fiscal first-quarter 2027 revenue outlook of $10.3 billion to $10.8 billion, raising fears that high NAND pricing may be peaking.

My trade

Seeing a severe disconnect between short-term guidance jitters and rock-solid secular fundamentals, I initiated a long swing position in SNDK at $1,495 as the stock began stabilizing near its current support levels. The market is overlooking that SanDisk has contractually insulated itself from historical chip cyclicality by locking in over $93.9 billion in minimum revenue commitments through strategic multi-year agreements. These contracts guarantee floor pricing for over half of its 2027 bit production. Technically, the stock’s forward price-to-earnings multiple has compressed into an ultra-cheap 5.7x fiscal 2027 earnings, presenting an asymmetric risk-reward window to buy institutional-grade AI hardware infrastructure at a massive discount.

Takeaway

SanDisk has successfully transitioned from a consumer accessory brand into a dominant infrastructure provider for global AI data centers.

The stock’s recent 35% drawdown over short-term guidance creates a rare opportunity to buy a high-moat asset at a dirt-cheap 5.7x forward P/E

.Investors who can tolerate semiconductor volatility stand to capture significant upside as the market re-rates toward Wall Street’s $2,133 target.

It's just something very important, very awesome. Go for it, me.

I guess a USD 222 close for 27th.

this is approximately 5% up, and probably befitting of the exceptional results it has delivered, considering a recent seven day losing streak, which actually hasn't brought the price down to my target for accumulation. I also considered that this name has a moderate beta at around 1.96, I feel it is less likely to have tremendous one day swing of above +7%

Went up by quite a bit, but beware of round tripping…

A ±7% swing on a 355B. Given the mixed signals (great top-line growth vs. margin compression), an explosive 7%+ jump is unlikely, but a negative close is also improbable because the core AI demand story remains intact. The initial after-hours price action settling around +4% points directly to the "2% to 7%" bucket.

The consecutive decline leading into the earnings call is soeculated to be profit taking. Currently, the macro environment and the AI trade sentiments are not exactly on solid ground. Of late, concerns like capex ROI, circular financing, etc. have made the the market very sensitive and always scrutinizing the finest detail to pick up something to worry about.