BlockBeats news, on August 6, Goldman Sachs' TMT team stated that SanDisk and Western Digital both declined after hours, despite both companies reporting strong quarterly results. The market's focus was not on this quarter's data, but rather on the fact that buy-side expectations had already been elevated prior to the earnings release.
SanDisk's revenue, gross margin, and earnings per share all exceeded expectations, but its third-quarter revenue guidance was slightly below market estimates, while EPS guidance was largely in line. Amid a prior significant rise in its stock price, 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 year 2027 and 65% for fiscal year 2028, with price floors in place, providing support for NAND pricing visibility and share repurchases.
Western Digital's revenue, profit margin, and earnings per share also exceeded expectations, and its third-quarter revenue and margin guidance was above market estimates, yet the stock still declined. Goldman Sachs believes that, given the high expectations for HDD prices and margins, the company's guidance did not significantly raise market expectations further. The market is also concerned that storage capacity shipments may slow during the company's efforts to scale up production of 40TB ePMR products and achieve HAMR certification.
Goldman Sachs summarized the evening's performance as "beating expectations, but still not enough to meet high expectations." The fundamentals for NAND and HDD remain supportive, but market expectations are already at a high level.