On the surface, Western Digital (WDC +2.21%) and Sandisk (SNDK -5.09%) are running the same race. The two were one company until they separated in 2025, and both sell storage into the AI (artificial intelligence) data center build-out.
Both also surged on Thursday. Western Digital rose 15.4% to $533.04 while Sandisk jumped 26% to $1,279.96, after Samsung forecast that the memory supply shortage will get worse in 2027 and persist into 2028. Friday split them: Western Digital added another 2.2% to close at $544.84, while Sandisk gave back 5.1% to $1,214.83.
And both stocks sit far below their record highs. That, however, is where the sameness ends. Western Digital, at $544.84, needs about a 47% gain to reclaim its high of $799.87. Sandisk, at $1,214.83, needs about 94% to get back to $2,354.39.
My prediction is that Western Digital gets there first -- and not only because its gap is smaller. The two recoveries depend on different things, and Western Digital's is the one its own guidance already describes.
Image source: Getty Images.
Western Digital's climb is partly guided
Western Digital makes hard drives, and cloud data centers keep buying more of them. Revenue in the company's fiscal third quarter rose 45% year over year to $3.3 billion.
Guidance points higher still. Management forecast fiscal fourth-quarter revenue of $3.65 billion, plus or minus $100 million, implying growth of 36% to 44% year over year. It also guided for adjusted earnings of about $3.25 per share (a jump from $2.72 in just one quarter) at an adjusted gross margin of 51% to 52%, up from 50.5%.
CEO Irving Tan said in the earnings release that the company started calendar 2026 with strong sequential and year-over-year revenue growth across its businesses while expanding gross and operating margins.
NASDAQ: WDC
Key Data Points
Hold the stock's valuation multiple still, and a 47% recovery requires about 47% earnings growth. Management's guidance (earnings per share up about 20% sequentially) covers a meaningful piece of that in a single quarter. If anything even loosely resembling that pace continues into fiscal 2027, the earnings could close the gap within a few quarters.
However, one caveat on quality: Western Digital's reported earnings of $8.20 per share last quarter towered over the $2.72 adjusted figure, with the difference largely tied to the changing value of the Sandisk stake it kept at the separation. The adjusted number is the one to track.
Sandisk's climb needs prices to keep rising
Sandisk is the faster-moving of the two. The NAND flash maker's fiscal third-quarter revenue rose 251% year over year to $5.95 billion, and it earned $23.03 per share in a single quarter. Guidance calls for fiscal fourth-quarter adjusted earnings of $30 to $33 per share, up about 28% to 41% from the quarter's comparable adjusted figure of $23.41.
The trouble is what a 94% recovery requires. Run the guided quarter at an annual pace, and Sandisk's earnings power is roughly $126 per share, which puts the stock at about 10 times that pace. To reclaim $2,354.39 without a richer valuation multiple, earnings power would need to approach $245 per share -- nearly double a level that is already, by any historical standard, extraordinary. NAND pricing would likely need to keep climbing well into 2027.
NASDAQ: SNDK
Key Data Points
It might. Samsung's shortage forecast points that way. And to the company's credit, Sandisk has signed five multi-year customer agreements backed by firm financial commitments, and it carries no debt.
Of course, the same earnings arrived at historic speed. The company that earned $23.03 per share last quarter was losing money in the same period a year earlier. Swings in this business run in both directions, and Sandisk's earnings are arguably the newest and least tested of the pair.
The first test comes Wednesday
Both companies report fiscal fourth-quarter results on Wednesday, Aug. 5. Those reports are the first checkpoint for this call. Western Digital needs to deliver its guided step and point higher. Sandisk needs to show that its pricing assumptions can survive its own outlook.
To be clear, this is a prediction about the race, not a recommendation to buy either stock at these prices. Storage is a cyclical business, and a 26% single-day surge says plenty about how much hope is packed into both names.
But the recovery that's already described by guidance should likely finish before the one that needs record prices to keep setting records. So, I'd expect Western Digital to touch $800 first. If Wednesday's reports rewrite either company's trajectory, I'll revisit the call.
