Sandisk, Western Digital Drop 10% as AI Trade Stalls
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- Sandisk and Western Digital fell roughly 10% in pre-market trading Thursday despite reporting earnings beats, with both stocks sitting about 50% below their all-time highs after 12-month AI-fueled runs of 3,000%+ and 550%.
- Sandisk posted record Q4 revenue of $8.97 billion and non-GAAP EPS of $39.25, while its board approved an additional $14 billion share buyback, bringing total authorization to $15.5 billion.
- Western Digital delivered revenue of $3.75 billion (up 44% YoY) with gross margin of 54.4% — a solid beat that still wasn't enough to satisfy investors after a 500% run-up.
- The real culprit was Sandisk's Q1 revenue guidance of $10.7 billion, which fell short of the $11.2 billion analysts had expected.
- Bitcoin holds above $64,000 and gold has surged more than 7% in recent days, with Bitcoin absorbing the Coldcard wallet exploit without meaningful reaction — fueling the thesis that capital is rotating from AI winners into crypto and precious metals.
Why it matters: The $14B Sandisk buyback expansion shows management views the post-earnings drop as a buying opportunity, while Sandisk's $500M guidance shortfall ($10.7B vs $11.2B expected) underscores the gap between AI-storage expectations and results. Bitcoin's defense of $64,000 alongside a 7%+ gold rally points to capital beginning to leave the AI trade.
