Data-storage names fell sharply in premarket trading after two of the group's largest players reported quarterly results and guided the coming quarter in line with, but not above, market hopes.
Sandisk dropped 9.2% to trade at $1,226.04, while Western Digital slid 14.6% to $443.3. Both companies provided first-quarter revenue outlooks after the close on Wednesday that beat estimates compiled by LSEG, but did not satisfy the very elevated expectations many investors have for AI beneficiaries.
The market reaction underlines how much optimism has been priced into names perceived to benefit from surging AI data-center demand. Sandisk has advanced more than fivefold so far this year and Western Digital has more than tripled, gains that far exceed a near-70% rise in the Philadelphia SE Semiconductor Index and a 12.8% gain in the S&P 500.
Industrywide, the sharp uptick in prices for high-end memory chips amid constrained supply has materially bolstered vendor profitability. Still, traders have punished companies at the slightest indication that extraordinarily strong growth could settle back to a more normalized pace.
Guidance and analyst views
Sandisk projected first-quarter revenue of between $10.3 billion and $10.8 billion. Western Digital set its Q1 revenue estimate at $4.1 billion, plus or minus $100 million. Although both forecasts exceeded LSEG consensus, they were deemed insufficient against the lofty benchmarks investors have set for AI-focused hardware suppliers.
Brokerage RBC Capital Markets noted that Sandisk's long-term customer agreements are helping to extend visibility into its business, but added it expects "investor skepticism to continue." The firm also cautioned that margins could be near peaks and that price growth was moderating.
Broader market moves
Other storage and memory names also moved lower. Seagate Technology fell 3.6%. Memory chipmaker Micron Technology was down 3.7%. U.S.-listed shares of SK Hynix slid 6.2%.
Stocks tied to chips and AI infrastructure also saw declines: Intel fell 1.2%, AMD was off 1%, and Marvell Technology lost 1.1%.
Data-center demand and company performance
Despite the market's reaction, company-reported demand metrics point to strong pull from data centers. Sandisk said revenue from data centers rose more than 400% in 2026 versus 2025, and that it doubled in the fourth quarter compared with the third quarter. Analysts continue to see data-center demand as a supporting trend for these firms even as investor sentiment swings with each earnings cycle.