By Reuters

(Reuters) - Data storage companies tumbled in premarket trading on Thursday after quarterly results from Sandisk and Western Digital failed to sustain momentum in an ‌industry that has become one of Wall Street's hottest bets this year.

Shares of Sandisk ‌lost 9.2% to trade at $1,226.04, while Western Digital shed 14.6% and was last changing hands at $443.3.

After the closing bell ​on Wednesday, both Sandisk and Western Digital forecast quarterly revenue that beat estimates compiled by LSEG, but fell short of high market expectations.

The reaction underscores the high bar set for the market's AI favorites after stellar gains this year, with even strong earnings and upbeat forecasts failing to ‌satisfy investors.

Sandisk has soared more ⁠than fivefold this year and Western Digital has more than tripled on bets that data storage and memory chipmakers could be among the biggest ⁠beneficiaries of Big Tech's AI spending spree.

Both Sandisk and Western Digital have far outpaced a near-70% rise in the Philadelphia SE Semiconductor Index and a 12.8% gain in the benchmark S&P 500.

A global ​shortage of ​high-end memory chips has fueled a sharp rise ​in chip prices, filling the coffers ‌of industry players.

But even as demand for AI data-center components shows few signs of easing, investors are punishing companies at the slightest hint that the growth may normalize.

DEMAND ROBUST, BUT SKEPTICISM COULD LINGER

Brokerage RBC Capital Markets said while Sandisk's long-term customer agreements were helping extend visibility into its business, it expects "investor skepticism to continue."

• 

  Predict and win massively with the world largest prediction markets. Join thousands of traders who have earned over $10,000,000 in cashout.

  
  
  Polymarket Ad

Margins could be near peaks and price growth was ‌moderating, the brokerage said.

Sandisk forecast first-quarter revenue between $10.3 billion ​and $10.8 billion, while Western Digital expects $4.1 billion, plus or ​minus $100 million, in Q1 revenue.

Peer Seagate Technology ​fell 3.6%. Memory chipmaker Micron Technology , which vaulted into the industry's upper ‌echelons after topping $1 trillion in market value ​in late May, was ​down 3.7%.

U.S.-listed shares of SK Hynix slid 6.2%. Intel fell 1.2%, AMD was off 1% and Marvell Technology lost 1.1%.

Still, analysts see data center demand continuing to lift ​these firms. At Sandisk, revenue ‌from data centers rose more than 400% in 2026 over 2025. It doubled ​in the fourth quarter, compared to the third quarter.

(Reporting by Purvi Agarwal and ​Niket Nishant in Bengaluru; Editing by Pooja Desai)

This week on Reuters

• Bank Indonesia wants more lending from commercial banks, acting governor says

• How investors buy gold and what fuels the market

• Which midterm candidates is the crypto industry backing?

• Japan's fight with yen bears goes on after joint rescue