Shares of both Western Digital (NASDAQ: WDC) and SanDisk (NASDAQ: SNDK) fell sharply in extended trading on Wednesday, even after the storage giants reported quarterly results that comfortably beat analyst estimates. Western Digital shed up to 10.8% after hours, on top of a 5.4% regular-session loss, while SanDisk dropped over 5% in after-hours trade following a similar daytime decline.
Western Digital reported adjusted earnings of $3.56 per share, up from $1.70 a year earlier and above the $3.31 consensus. Revenue surged 44% to $3.75 billion, also exceeding the $3.70 billion forecast. At SanDisk, adjusted earnings reached $39.25 a share versus the expected $34.96, and revenue of $8.97 billion beat the $8.48 billion estimate. Both companies benefited from tight supply, favorable pricing, and booming demand from cloud and AI workloads.
Despite these impressive numbers, the market reaction was overwhelmingly negative. Investors had priced in extraordinary growth after Western Digital’s stock rallied over 190% in 2026. The company’s guidance for the current quarter — revenue of $4.0–$4.2 billion and adjusted EPS of $3.85–$4.15 — only modestly topped consensus. Compared to rival Seagate, Western Digital’s outlook appeared less aggressive, fueling disappointment. SanDisk’s first-quarter revenue midpoint of $10.55 billion fell just short of the roughly $10.8 billion analysts had modeled, even as it signed long-term supply deals worth $93.9 billion with six major customers.
Analysts maintain that the AI-storage narrative remains intact, but the stocks now face a higher bar to justify their valuations. Wedbush’s Matt Bryson and Bernstein had previously raised targets, citing tight NAND supply and multi-year contracts. However, the sell-off shows that stellar earnings alone are no longer enough — the market demands accelerating upside surprises.
