SanDisk and Western Digital Earnings Disappoint Despite Strong Quarterly Results

Goldman Sachs released reports commenting on the latest earnings reports of SanDisk and Western Digital. The James Schneider team at Goldman Sachs believes that both companies' revenue, gross margin, and earnings per share exceeded expectations in their quarterly reports.

However, the market's expectations were overly optimistic, making it difficult for the stock prices to benefit from the impressive performance. The lackluster guidance is seen as a negative signal, with both stocks expected to face pressure after the earnings reports are released.

The report highlighted that Western Digital's revenue and gross margin exceeded expectations, but its forward guidance failed to impress. SanDisk's quarterly results were even more impressive, with revenue growing 371.6% year-over-year, but its guidance for the third fiscal quarter fell short of expectations.

Goldman Sachs maintains a 'buy' rating on SanDisk and a 'neutral' rating on Western Digital, with target prices of $2,200 and $650 respectively. The report also notes that Micron Technology is expected to experience a negative reaction after SanDisk's earnings report is released due to similar end-market exposure.