Sandisk, WDC drag chip sector lower as lofty valuations spur pullback in AI trade
WDC•Valuations cool after massive year-to-date rallies
Stocks came under pressure after massive year-to-date rallies: Sandisk was up about 469%, and WDC about 201%, versus a 13.4% gain in the Nasdaq (.IXIC).
Forecasts remain above estimates on AI-driven demand
Sandisk forecast Q1 revenue of $10.3 billion-$10.8 billion; analysts on average estimated $10.47 billion, according to LSEG-compiled data.
WDC sees Q1 revenue of $4.1 billion, plus or minus $100 million, compared with an estimate of $4.04 billion.
Both companies continue to benefit from strong AI-driven data center demand.
SNDK is shifting its business model to long-term purchase agreements to increase revenue visibility; the CEO said half of fiscal 2027 production is already sold under such deals.
Chip sector slips as Sandisk and Western Digital tumble
Sandisk (SNDK.O) slid nearly 8.5%, while Western Digital (WDC.O) slumped over 23%, dragging other chipmakers down, despite both forecasting Q1 revenue above Wall Street estimates.
