Sandisk, Western Digital weigh on chip sector as high expectations eclipse strong earnings
FILE PHOTO: Semiconductor chips are seen on a printed circuit board in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration/File Photo
Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
Aug 6 : 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 per cent to trade at $1,178, while Western Digital shed 19.1 per cent 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.
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
“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 per cent rise in the Philadelphia SE Semiconductor Index and a 12.8 per cent 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 per cent, while memory chipmaker Micron Technology , which vaulted into the industry’s upper echelons after topping $1 trillion in market value in late May, was down 7 per cent.
U.S.-listed shares of SK Hynix slid 8.5 per cent. Intel fell 4.7 per cent, AMD was off 1.4 per cent and Marvell Technology lost 3.6 per cent.
Still, analysts see data center demand continuing to lift these firms. At Sandisk, revenue from data centers rose more than 400 per cent in 2026 over 2025, doubling in the fourth quarter compared to the third quarter.
Source: Reuters
Sign up for our newsletters
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
About The Author
