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SanDisk posted strong third-quarter results, but investors reacted cautiously, sending shares down more than 6% during Thursday’s extended trading session. The company reported quarterly revenue of $5.95 billion, up 97% year over year, and well above the $4.70 billion analyst projection. On an adjusted basis, earnings reached $23.41 per share, compared with a $14.54 Wall Street forecast.
Management’s Q4 outlook also exceeded consensus. Revenue guidance ranged from $7.75 billion to $8.25 billion versus a $6.49 billion analyst estimate. Adjusted earnings guidance of $30 to $33 per share topped the $22.70 Wall Street expectation.
Despite the upside, the stock sold off. Cerity Partners analyst Michael Ashley Schulman said the forward guidance did not deliver the “wow factor” needed to sustain the stock’s recent rally. Western Digital faced a similar reaction, declining nearly 8% in the same trading session even though it also reported results and issued above-consensus guidance.
Chief Executive David Goeckeler described the quarter as “transformational,” saying it marks a fundamental inflection point as SanDisk shifts its mix toward higher-value end markets, led by Datacenter.
The Datacenter segment was the standout performer, with revenue increasing more than threefold in Q3 to $1.47 billion. The company attributed the strength to demand dynamics tied to artificial intelligence applications, which require large volumes of flash storage capacity. With demand outstripping available supply, SanDisk has been able to pursue premium pricing.
The storage industry is positioned as a key beneficiary of AI infrastructure expansion. Data centers need high-capacity storage to archive, train, and manage large AI datasets. While GPUs provide computing power, hard disk drives and flash memory support data management, and the article notes that this requirement shows no sign of easing.
Seagate reported fiscal 2025 annual revenue of $9.10 billion, up 39% year over year. Its most recent quarterly revenue was $3.11 billion, up 44% and above the $2.95 billion analyst estimate. Adjusted earnings per share were $4.10, exceeding the $3.50 consensus projection.
Western Digital reported fiscal 2025 revenue of $9.52 billion, up 51% year over year. Second-quarter revenue was $3.02 billion, ahead of the $2.98 billion Wall Street forecast. Adjusted earnings per share were $2.13 versus $1.95 expected.
Bank of America analyst Wamsi Mohan described the hard disk drive sector as an “oligopoly,” with limited competition and little threat from new entrants. In this market structure, Seagate and Western Digital have significant pricing authority as major technology companies compete for storage capacity.
Mohan also pointed to long-term supply contracts as a shift toward more stable and predictable revenue streams, with both companies increasingly securing customer commitments rather than relying solely on transactional hardware sales.
He cited heat-assisted magnetic recording (HAMR) technology as another positive development. The innovation is designed to increase data density on existing drive platforms, which can reduce material costs while expanding storage capacity.
Mohan’s optimistic scenario projects Seagate earnings approaching $45 per share by 2028, paired with a $700 price objective. For Western Digital, his analysis suggests potential earnings of $33 per share, with a $495 price target.
SanDisk shares had gained roughly 350% during 2025 prior to Thursday’s after-hours decline.
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