Goldman Sachs: SanDisk and Western Digital Beat Earnings, but Shares Decline Post-Earnings

Huoxing Finance reports that on August 6, Goldman Sachs’ TMT team noted that SanDisk and Western Digital both declined in after-hours trading despite strong quarterly results. The market’s focus was not on the current quarter’s figures, but rather on the fact that buy-side expectations had already been elevated prior to the earnings release. SanDisk’s revenue, gross margin, and EPS all exceeded expectations, but its Q3 revenue guidance was slightly below market estimates, while EPS guidance was broadly in line. Amid a prior significant stock price increase, the earnings report triggered some profit-taking. More positively, SanDisk has secured multi-year customer supply agreements covering over 50% of its planned bit output for fiscal 2027 and 65% for fiscal 2028, with price floors in place, providing support for NAND pricing visibility and share repurchases. Western Digital’s revenue, margins, and EPS also exceeded expectations, and its Q3 revenue and margin guidance were above market estimates, yet its stock still fell. Goldman Sachs believes that, given already high expectations for HDD pricing and margins, the company’s guidance failed to significantly raise market outlooks further. The market also expressed concern that storage capacity shipments may slow during Western Digital’s ramp-up of 40TB ePMR products and HAMR certification. Goldman Sachs summarized the night’s performance as “beat on results, but not enough to meet elevated expectations.” Fundamentals for NAND and HDD remain supportive, but market expectations are already at high levels.