Sandisk and Western Digital’s 10% Drop Sparks Market Concerns Over Bitcoin’s Next Move

Strong quarterly results from Sandisk and Western Digital failed to impress investors, fueling speculation that market capital may be starting to move away from AI-focused winners and back toward assets like crypto.

Sandisk (SNDK) and Western Digital (WDC), two major companies that have benefited from the artificial intelligence-driven storage boom, both dropped about 10% in pre-market trading on Thursday despite announcing better-than-expected earnings.

Sandisk reported record fiscal fourth-quarter revenue of $8.97 billion along with adjusted earnings per share of $39.25, easily exceeding Wall Street forecasts. Western Digital also surpassed expectations, posting revenue of $3.75 billion, representing a 44% year-over-year increase, while gross margins expanded to 54.4%. However, both stocks are now trading around 50% below their previous record highs.

The main concern came from forward guidance. Sandisk’s first-quarter forecast fell short of analyst expectations, with revenue projected at $10.7 billion compared with estimates of $11.2 billion. Its earnings outlook also disappointed investors. Western Digital’s guidance was stronger, but after a massive 500% rally, investors were expecting another exceptional performance.

Over the past year, Sandisk and Western Digital have surged more than 3,000% and 550%, respectively, driven by enthusiasm around AI infrastructure spending. During that period, traditional assets such as cryptocurrencies and precious metals were largely left behind.

Sandisk also announced that its board approved an additional $14 billion share repurchase program, increasing its total buyback authorization to $15.5 billion.

However, as momentum in the AI trade begins to weaken, investors may be shifting their focus. Gold has climbed more than 7% in recent days, while bitcoin has remained above $64,000 and showed limited reaction to the Coldcard wallet exploit.

Crypto market participants may see these developments as signs of a potential change in capital flows, especially given the ongoing narrative that investors have been reallocating funds toward AI-related assets at the expense of bitcoin and other cryptocurrencies.