To The Moon

Storage's Earnings Week: A Valuation X-Ray of Top Names

This week (the Jan 27–29 earnings window), the storage complex delivered a highly consistent message to the market: across HDD (nearline), NAND/eSSD, and DRAM/HBM, the industry's "supply discipline + extended visibility from large customers: is pushing the cycle from a "rebound" toward a "repricing" phase. 

The most important point of resonance across several research notes this week is that multiple companies are stressing that 2026 capacity is largely locked in/sold out—and some are already talking about 2027—which is not typical in a standard memory/storage cycle.

A Valuation Look-Through

Memory names (DRAM/NAND) are still mostly single-digit to low-teens forward P/E (≈8–13x) despite sharply higher run-rate earnings. Especially SanDisk, which delivered a blowout quarter and guidance yesterday, quickly pulling its forward valuation down. 

HDD names (STX/WDC) screen at much higher forward P/E (~27–31x) largely because the current earnings base is smaller; their “multiple” is effectively a bet that earnings keep stepping up as tight supply persists.

The week's core message: "Visibility + supply discipline" is doing the heavy lifting

Across the covered reports, the qualitative takeaway is unusually consistent: vendors are explicitly signaling extended demand visibility and refusing to chase volume, which is how storage cycles usually die.

A) HDD: “Sold out for 2026” + early 2027 conversations

Both Seagate and Western Digital are framed as operating in a tight supply/demand regime where hyperscalers are effectively providing longer-dated demand signals than normal.

– $Seagate Technology PLC(STX)$   : Goldman highlights management's intent not to add unit production capacity, supporting a tight market and pushing "peak earnings power" higher than investors typically assume. 

Management commentary also points to 2026 capacity sold out and customers beginning to indicate 2027 volume needs, with pricing indications expected to follow. 

– $Western Digital(WDC)$   : Goldman similarly notes production capacity sold out for 2026 and expects hyperscalers to start placing 2027 orders. 

Importantly, the note says two customers have already signed 2027 LTAs (long-term agreements)—that's a concrete "visibility artifact," not just optimistic language. 

Pricing signal remains constructive: price per TB was up modestly and expected flat to slightly up near term, consistent with a tight market. 

B) NAND / eSSD: Tight supply + mix upgrade becomes a "re-rating" narrative

– $SanDisk Corp.(SNDK)$  : Goldman's framing is blunt: continued supply-side prudence keeps NAND increasingly undersupplied, and the enterprise market bit-growth outlook is described at "high-60%" for 2026, supporting ongoing gross margin expansion. 

The qualitative pivot isn't just "pricing up," it's "pricing up and mix richer," with Goldman modeling peak gross margins into the low-70% range. 

On product traction: SNDK has now qualified its TLC enterprise SSD with a second hyperscaler, with a production ramp expected in coming quarters—i.e., "AI/enterprise" isn't just talk, it's a qualification roadmap. 

The note also explicitly calls out a positive read-through to $Micron Technology(MU)$   given similar end-market exposures. 

C) DRAM / HBM: "B2B concentration" is the story, not broad-based consumer demand

– SK hynix: JPM emphasizes management's view that 2026 demand is increasingly CSP-concentrated, with HBM, server DRAM, and eSSD driving bit demand, while PC/mobile remain weak under higher memory cost burdens. 

UBS addresses the market's biggest worry (cycle overshoot) by framing 2026 capex as supporting expected HBM growth (AI) rather than indiscriminate expansion across memory. 

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