Sandisk, Western Digital beat expectations as cloud and AI data center storage demand accelerates – News

Shares in both Sandisk Corp. and Western Digital Corp. rosein late trading today after both impressed with better-than-expected quarterly results, benefiting from rising storage demand as cloud and artificial intelligence data center workloads continue to grow.

For its fiscal 2026 second quarter that ended on Jan. 2, Sandisk reported adjusted earnings per share of $6.20, up from $1.23 in the same quarter of the previous fiscal year, on revenue of $3.025 billion, up 61% year-over-year. Both figures came in well ahead of the $3.49 per share and revenue of $2.67 billion expected by analysts.

Sandisk shares were trading up more than 12% as of 5:30 p.m. EST.

SanDisk saw modest growth in flash volumes during the quarter, with bit shipments up in the low single digits, but delivered significantly stronger financial results as pricing improved sharply across its portfolio. The average selling prices per gigabyte rose in the mid-30% range, driven by tighter NAND supply and a shift toward higher-value products, particularly enterprise SSDs used in cloud and artificial intelligence data center deployments.

The company’s datacenter revenue, which came in at $440 million, was up 64% quarter-over-quarter and 76% year-over-year, driven by strong adoption among AI infrastructure builders, semi-custom customers and technology companies deploying AI at scale. Edge revenue saw similar growth, up 52% year-over-year to $1.678 billion and consumer revenue was up 61% year-over-year to $907 billion.

Business highlights in the quarter include Sandisk introducing a breakthrough in the USB form factor with the launch of Sandisk Extreme Fit, the company’s smallest high-capacity USB-C flash drive that delivers a differentiated “stay-put” solution for PCs and smartphones.

“This quarter’s performance underscores our agility in capitalizing on better product mix, accelerating enterprise SSD deployments and strengthening market demand dynamics, all at a time when the critical role that our products play in powering AI and the world’s technology is being recognized,” said Sandisk Chief Executive David Goeckeler. “Our structural reset to align supply with attractive, sustained demand positions us to drive disciplined growth and deliver industry-leading financial performance.”

For its fiscal third quarter, Sandisk expects adjusted earnings per share of $12 to $14, nearly three times the $4.21 that was forecast by analysts and revenue of $4.4 billion to $4.8 billion, also higher than an expected $2.92 billion.

While not smashing analyst expectations as far out of the park like Sandisk did, Western Digital also had impressive results, with the company reporting adjusted earnings per share of $2.13, up from $1.20 the year prior, on revenue of $3.017 billion, up 25% year-over-year, in its fiscal 2026 second quarter ending Jan. 2.

Both figures came in healthily ahead of the $1.91 per share and revenue of $2.92 billion expected by analysts.

Western Digital saw cloud revenue in the quarter of $2.673 billion, up 27.5% year-over-year, client revenue of $176 million, up 25.7%, and consumer revenue of $168 million, down 2.9% year-over-year.

“Western Digital’s strong performance this quarter reflects our disciplined execution to meet demand in the AI-driven data economy and the confidence our customers place in our ability to deliver reliable, high-capacity HDDs at scale,” said CEO Irving Tan. “In our fiscal second quarter, we delivered strong revenue growth and gross margin expansion.”

For its fiscal third quarter, Western Digital expects adjusted earnings per share of $2.30 and revenue of $3.2 billion at the midpoint for both. Analysts had been expecting an outlook of $1.99 per share and revenue of $2.98 billion.

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