Sandisk posted a strong third quarter, but Wall Street wasn’t impressed enough to hold the stock up. Revenue came in at $5.95 billion, up 97% year-over-year and well ahead of analyst estimates of $4.70 billion. Adjusted earnings hit $23.41 per share, crushing the $14.54 estimate.
The stock, which had already surged around 350% this year, still dropped more than 6% in after-hours trading on Thursday.
The Q4 revenue forecast of $7.75 billion to $8.25 billion was far above the $6.49 billion analyst consensus. Adjusted profit guidance of $30 to $33 per share also topped the $22.70 estimate by a wide margin.
So why did the stock fall? Analyst Michael Ashley Schulman of Cerity Partners put it plainly — the outlook failed to provide the “wow factor” needed to keep the momentum going. Western Digital, which also beat estimates and guided above consensus, slipped nearly 8% in the same session.
CEO David Goeckeler framed the quarter as a turning point. “This quarter marks a fundamental inflection point for Sandisk — where our technology leadership is enabling a deliberate shift in our mix toward the highest-value end markets, led by Datacenter,” he said.
The Datacenter segment was the standout, with revenue more than tripling in Q3 to $1.47 billion. AI workloads require enormous amounts of flash storage, and demand is running ahead of supply — giving Sandisk room to charge higher prices.
The broader storage sector has been one of the clearest beneficiaries of the AI buildout. Data centers need high-capacity drives to store, train, and manage large AI datasets. While GPUs handle the compute, hard disk drives and flash storage handle the data — and that demand isn’t slowing.
Seagate reported fiscal 2025 annual revenue of $9.10 billion, up 39% year-over-year. Its most recent quarter came in at $3.11 billion, up 44% and ahead of the $2.95 billion estimate. Adjusted EPS of $4.10 beat the $3.50 consensus.
Western Digital posted fiscal 2025 revenue of $9.52 billion, up 51% year-over-year. Its second quarter revenue of $3.02 billion beat the $2.98 billion Wall Street estimate. Adjusted EPS of $2.13 topped the $1.95 expectation.
Bank of America analyst Wamsi Mohan described the HDD market as an “oligopoly,” with only a handful of players and little threat of new entrants. That structure gives Seagate and Western Digital pricing power as tech giants scramble for storage capacity.
Mohan also pointed to long-term supply agreements as a shift toward more predictable, recurring revenue. Both Seagate and Western Digital are increasingly locking in customers rather than relying on spot hardware sales.
Heat-assisted magnetic recording (HAMR) technology is another tailwind. It allows companies to pack more data onto existing drives, cutting material costs while boosting capacity.
Mohan’s bull case has Seagate earnings nearly doubling to $45 per share by 2028, with a price target of $700. For Western Digital, he sees potential earnings of $33 per share and a price target of $495.
Sandisk’s stock had risen roughly 350% in 2025 before Thursday’s after-hours drop.
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