SanDisk (SNDK) and Western Digital (WDC) Market Trends and Analyst Expectations
SanDisk (SNDK)
AI-Driven Demand and Market Position
SanDisk is positioned as a key beneficiary of the AI spending cycle due to accelerating demand for its NAND memory products, which are crucial for AI infrastructure.
The company specializes in NAND flash memory for data centers, AI servers, and edge devices, aligning directly with increased storage needs from AI workloads.
SanDisk's Enterprise SSDs are considered an industry standard for "checkpointing" in AI training, requiring ultra-fast storage.
It has gained 2 percentage points of NAND market share during the 12 months ending June 2025, with hyperscalers testing its enterprise SSDs.
Financial Performance and Outlook
For 2026 Q1, SanDisk's revenue was $2.308 billion, up 0.2257% YoY, and Net Income was $112 million, down 0.4692% YoY.
The company beat analyst estimates for Revenue, EPS, and Net Income in Q1 2026, with revenue surprising by 7.38% and EPS by 15.38%.
Management expects strong growth and improved profitability for Q2 2026, with projected revenue between $2.55 billion and $2.65 billion and adjusted EPS between $3.00 and $3.40. These projections are notably above the Street's current estimate of $2.94 EPS.
SanDisk benefits from an unprecedented memory chip shortage and strong pricing power, with NAND prices climbing over 30% in late 2025.
Analyst Sentiment and Valuation
Analysts have a "Moderate Buy" rating with an average price target of $298.89, which is below the current trading price.
Some analysts, like Harlan Sur of J.P. Morgan, suggest the stock is overvalued and could see a 53% downside, setting a target at $235.
The stock has seen a significant rally (over 1,000% since early 2025), leading to concerns about stretched valuations. Its forward P/E of 35.64 is higher than the semiconductor industry average of around 25.
Technical indicators like the RSI at 86.37 suggest overbought conditions, hinting at a potential pullback.
Western Digital (WDC)
AI Storage and Technology Leadership
Western Digital is positioning itself as a trusted AI storage leader, providing cold-tier storage (HDDs) for massive datasets used in AI model training.
The company is advancing its technology with HAMR (Heat-Assisted Magnetic Recording) for higher-density drives, aiming to exceed 40 terabytes.
Western Digital's focus on AI-driven storage needs is reshaping its long-term role in the data infrastructure ecosystem.
Financial Performance and Outlook
For 2026 Q1, Western Digital's revenue was $2.818 billion, up 0.2740% YoY, and Net Income was $1.182 billion, up 1.3976% YoY.
The company also beat analyst estimates for Revenue, EPS, and Net Income in Q1 2026, with EPS surprising by 111.72%.
The next earnings release is slated for January 29, with current-quarter EPS expected at $1.80 versus $1.55 a year earlier, implying roughly 16.13% growth.
Analyst Sentiment and Valuation
Multiple Wall Street firms have boosted their outlooks ahead of the earnings report, citing a healthier storage pricing backdrop and strong data-center demand.
Bank of America raised its price target to $257 from $197, and Cantor Fitzgerald increased its price target to $300 from $250. Rosenblatt Securities also raised its price target to $270.
Analyst consensus is a "Strong Buy," although the average price target of $216.95 implies about 10.8% downside from current trading prices.
Simply Wall St models the shares as trading about 13.9% below its estimated fair value. A Discounted Cash Flow model suggests a 16.1% discount, indicating it screens as undervalued.
Its P/E ratio of 31.1x is above the tech industry average P/E of 22.5x.
Western Digital's shares are extremely volatile, with 38 moves greater than 5% over the last year.
General Market Trends
The broader semiconductor sector is experiencing strength due to the ongoing digitalization wave and rapid deployment of AI, fueling demand for high-performance computing and data-center infrastructure.
An unprecedented, persistent memory chip shortage with demand materially outpacing supply is a key driving factor for the industry, especially due to AI workloads. DRAM prices surged 170% and NAND prices climbed almost 250% from early to late 2025.
Data storage companies, including SanDisk and Western Digital, have been top performers in the S&P 500 in 2025, with significant gains.
The AI-powered storage market is expected to grow substantially, from $30.27 billion in 2025 to a projected $187.61 billion by 2035.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
