SNDK, WDC Stocks Topple As Blowout Memory Earnings Don’t Surprise Enough — Retail Pounces On The Dip

• SanDisk’s revenue surged 88%, and Western Digital's profit jumped sixfold.
• SanDisk approved a $6 billion stock buyback program.
• Like how Micron’s stock dipped after its strong February results and later bounced back, retail investors believe SNDK and WDC will rebound.

SanDisk and its former parent Western Digital posted blowout earnings and issued upbeat guidance on Thursday. Yet, their stocks slipped in after-hours trading, suggesting profit-taking after a sharp run-up in recent months. Retail investors, however, appear to be treating it as a buying opportunity. 

SNDK stock tumbled 6%, while WDC shares dropped 8.2%. Before Thursday’s close, they have rocketed 362% and 152% year to date, respectively. 

Surging data center demand for memory chips—along with price hikes—has ushered in a supercycle for leading memory component makers, reflected in consistently strong top- and bottom-line growth over recent quarters.

“Numbers have been off the charts. They are great but they did not surprise any further that what Seagate reported,” Evercore ISI’s Amit Daryanani told CNBC in an interview. Seagate reported third-quarter results and fourth-quarter forecasts above expectations earlier this week.

SNDK, WDC Retail View Holds Firm

On Stocktwits, retail sentiment for SNDK and WDC shifted higher in the ‘extremely bullish zone, with many users forecasting a rebound and long-term strength in the shares.

“$SNDK honestly the results and call is insane. Plus buybacks. Just insane. I’m holding,” said a trader. SanDisk announced a $6 billion buyback program, which, at currently elevated stock levels, was one of the main discussion points for the retail community.  

Another wrote that the after-hours dip “reminds me of Micron earnings. Huge drop on best ever earnings then massive rebound to ATH two weeks later because eventually the numbers do matter.”

On the Western Digital stream, a user commented, “This will go back up in a very short time! Hang-in there bulls! We will bring home the bacon soon but for today, just have noodles.”

SNDK, WDC Results Recap

SanDisk’s revenue jumped a whopping 250% to $5.95 billion, beating analyst estimates of $4.72 billion. Data center revenues more than tripled during the quarter. Net profit jumped 88% to $3.62 billion.

Western Digital’s revenue increased 46% to $3.34 billion, also higher than estimates of $3.25 billion, and net profit jumped over six times to $3.21 billion. 

For the current fourth quarter, Western Digital said it expects adjusted earnings of $3.10 to $3.40 a share on revenue between $3.55 billion and $3.75 billion. Analysts are expecting adjusted earnings of $2.75 a share on revenue of $3.46 billion.

Sandisk expects adjusted fourth-quarter earnings between $30.00 and $33.00 per share on revenue between $7.75 billion and $8.25 billion. Analysts are expecting adjusted earnings of $23.38 on revenue of $6.62 billion.

Western Digital also said it was boosting its quarterly dividend by 20% to $0.15 a share.

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