Despite reporting strong earnings, Sandisk and Western Digital failed to win over investors, raising speculation that capital may be starting to shift away from AI-related winners and toward alternative assets, including crypto.
Sandisk (SNDK) and Western Digital (WDC), two companies that have benefited significantly from the artificial intelligence-driven demand for data storage, fell roughly 10% in pre-market trading Thursday even after posting solid quarterly results.
Sandisk delivered record fiscal fourth-quarter revenue of $8.97 billion and adjusted earnings per share of $39.25, exceeding analyst expectations by a wide margin. Western Digital also reported stronger-than-expected results, with revenue reaching $3.75 billion, up 44% from a year earlier, while gross margins expanded to 54.4%. Even with those gains, both stocks remain about 50% below their record highs.
The disappointment centered on future forecasts rather than past performance. Sandisk’s first-quarter guidance came in below market expectations, projecting revenue of $10.7 billion compared with analysts’ $11.2 billion estimate. Its earnings forecast also missed expectations. Western Digital provided a healthier outlook, but after gaining nearly 500%, investors were looking for another major upside surprise.
Over the past year, Sandisk and Western Digital have surged more than 3,000% and 550%, respectively, as investors poured money into companies linked to the AI expansion. During the same period, assets such as bitcoin and precious metals struggled to keep pace.
Sandisk also revealed that its board had approved an additional $14 billion stock buyback plan, bringing the company’s total authorized repurchase program to $15.5 billion.
However, signs of weakness in the AI trade have raised questions about whether a broader market rotation is beginning. Gold has climbed more than 7% in recent days, while bitcoin has remained above $64,000 and showed limited impact from the Coldcard wallet exploit.
For crypto investors, these moves could indicate a possible shift in market leadership. The recent narrative has been that investors redirected capital toward AI-related stocks, leaving bitcoin and other digital assets behind. A slowdown in that trend could create room for renewed interest in crypto markets.
