By Purvi Agarwal and Niket Nishant
Aug 6 (Reuters) – Data storage companies tumbled on Thursday after quarterly results from Sandisk and Western Digital failed to sustain momentum in an industry that has become one of Wall Street’s hottest bets this year.
Shares of Sandisk lost 13.3% to trade at $1,178, while Western Digital shed 19.1% and was last changing hands at $420. The latter was on track for its steepest one-day decline since April 2025, if losses hold.
After the closing bell on Wednesday, both Sandisk and Western Digital forecast quarterly revenue that beat estimates compiled by LSEG, but fell short of market expectations.
The reaction underscores the high bar set for the market’s AI favorites after stellar gains this year, with even strong earnings and upbeat forecasts failing to satisfy investors.
“The recent volatility in semiconductor stocks appears disconnected from any material change in long-term fundamentals,” said Divya Mathur, a portfolio manager at ClearBridge Investments.
“While investors may be reassessing expectations and risk appetite, share prices can often react more sharply than the underlying outlook would suggest in the short term.”
Sandisk has soared more than fivefold this year and Western Digital has more than tripled on bets data storage and memory chipmakers could be among the biggest beneficiaries of Big Tech’s AI spending spree.
Both Sandisk and Western Digital have far outpaced a near-70% rise in the Philadelphia SE Semiconductor Index and a 12.8% gain in the benchmark S&P 500.
A global shortage of high-end memory chips has fueled a sharp rise in chip prices, filling the coffers of industry players.
But even as demand for AI data-center components shows few signs of easing, investors are punishing companies at the slightest hint the growth may normalize.
DEMAND ROBUST, BUT SKEPTICISM COULD LINGER
Sandisk forecast first-quarter revenue between $10.3 billion and $10.8 billion, while Western Digital expects $4.1 billion, plus or minus $100 million, in Q1 revenue.
Wells Fargo analysts said Sandisk’s investors were likely digesting slowing upside revisions, driven by tapering price growth.
Seagate Technology fell 6.8%, while memory chipmaker Micron Technology
U.S.-listed shares of SK Hynix slid 8.5%. Intel fell 4.7%, AMD was off 1.4% and Marvell Technology lost 3.6%.
Still, analysts see data center demand continuing to lift these firms. At Sandisk, revenue from data centers rose more than 400% in 2026 over 2025, doubling in the fourth quarter compared to the third quarter.
(Reporting by Purvi Agarwal and Niket Nishant in Bengaluru; Editing by Pooja Desai)
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