SanDisk vs Western Digital vs Seagate: has the AI storage bubble burst?
SanDisk (SNDK), Western Digital (WDC) and Seagate (STX) all reported record results for the quarter ended October 2, 2026, the first quarter of each company's fiscal 2027. All three stocks then fell sharply after a weak outlook from Japanese memory maker Kioxia. So is the AI storage boom cracking, or did the market overreact?
Meet the three
SanDisk makes NAND flash, the memory inside solid-state drives. Western Digital and Seagate make hard drives, which still store most of the world's data in big data centres because they're cheaper per terabyte. AI workloads need both.
Round 1: Growth
| Company | Revenue | Growth vs a year ago |
|---|---|---|
| SanDisk | $11.03B | +378% |
| Western Digital | $4.38B | +55% |
| Seagate | $4.23B | +61% |
Round 2: Profit and cash
| Company | Adjusted gross margin | Free cash flow |
|---|---|---|
| SanDisk | 85.1% | $6.31B (adjusted $5.70B) |
| Western Digital | 58.1% | $1.38B |
| Seagate | 57.8% | $1.48B |
An 85% gross margin is extraordinary for a memory maker, which usually tells you prices are near a cyclical high. That's the core of the bubble question.
Round 3: Price, and the "5x" question
Taking each stock's price on November 3, 2026, divided by four times next quarter's adjusted EPS guidance gives an annualized run-rate multiple of roughly 5x for SanDisk, 15x for Western Digital and 16.5x for Seagate.
A run-rate multiple isn't a forward P/E. It assumes next quarter repeats for a full year. For a cyclical business near peak pricing, a very low multiple can mean the market expects earnings to fall, not that the stock is cheap.
Round 4: Risk
Memory is a famously cyclical industry: when supply catches up with demand, prices and margins can drop fast. SanDisk's answer is long-term agreements. Management says they cover more than half of its fiscal 2027 bit supply and about two-thirds of fiscal 2028, backed by roughly $16.5 billion of customer deposits and guarantees. That's meaningful protection, though contracts don't remove pricing risk entirely.
The verdict
The record quarters were real. What the market is pricing is how long they last. SanDisk offers the most growth and the most cycle risk; Western Digital and Seagate grew more slowly from steadier hard-drive demand. A falling stock after record results usually means investors are looking past the current quarter, not ignoring it.
Note: SanDisk splits 8-for-1, with post-split trading from November 20, 2026. Per-share figures quoted before that date will look about eight times larger.
Watch the full comparison on YouTube.
Disclosure: at the time of writing I don't own shares of SanDisk, Western Digital or Seagate. Education only, not financial or investment advice, and not a recommendation to buy or sell any security. Figures are as reported for the periods named; check the companies' own filings for current information. Prices as of November 3, 2026.