The memory trade is faltering as Western Digital's stock slides in the face of earnings beat

Dow Jones
2026.04.30 22:41

Western Digital's stock fell 8% in after-hours trading despite reporting strong earnings, with revenue of $3.3 billion and adjusted earnings of $2.72 per share, both exceeding expectations. This decline follows a significant one-year stock rally, with Western Digital up 900% and Sandisk up 3,300%. CEO Irving Tan announced a 20% dividend increase and provided a positive revenue outlook for the next quarter. Analysts noted a favorable pricing environment due to high demand for memory products.

By Britney Nguyen

Investors are panning upbeat results from Western Digital and Sandisk after massive one-year stock rallies

Western Digital stock was down in after-hours trading on Thursday.

Investors were punishing memory stocks in Thursday's extended session - even after strong earnings reports.

Western Digital shares (WDC) were down 8% in after-hours action, joining shares of Sandisk (SNDK), which were off 7%. These could be sell-the-news reactions to strong earnings reports given the extent of gains both stocks have made recently.

Western Digital's stock is up about 900% over the past year, and shares of Sandisk, which spun out of Western Digital early in 2025, are up roughly 3,300%.

See also: Sandisk's eye-popping earnings beat fails to extend the stock's big rally

The fiscal third-quarter report from Western Digital featured revenue of $3.3 billion, up 45% from a year ago, and ahead of the FactSet consensus for $3.2 billion. Adjusted earnings of $2.72 a share also topped estimates for $2.39.

"The demand drivers are clear: Virtually every AI workload, from training, inference, agentic AI to physical AI, creates data that is stored persistently and cost-efficiently on HDDs," Western Digital CEO Irving Tan said in a statement, referring to the company's hard disk drives. He also noted the company's 50.5% gross margin in the quarter, which was up significantly from a year before.

Citing confidence in the business, Tan announced a 20% increase to the quarterly dividend, which will become 15 cents a share.

For the June quarter, Western Digital is guiding for revenue to come in at $3.65 billion, plus or minus $100 million, which is above the FactSet consensus for $3.5 billion. The company's outlook for adjusted EPS calls for that to come in at $3.25, plus or minus 15 cents - also ahead of expectations for $2.75 on FactSet.

Ahead of the report, Bank of America analyst Wamsi Mohan noted a "favorable pricing environment" due to demand outstripping supply.

Don't miss: Micron's stock has boomed on AI optimism. Now comes the 'tricky part.'

-Britney Nguyen

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04-30-26 1841ET

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