A report released by the Goldman Sachs James Schneider team on August 5 pointed out that SanDisk and Western Digital's latest quarterly financial reports showed strong performance, with revenue, gross profit margin, and earnings per share all exceeding expectations. However, market expectations for the storage industry have run too far ahead of reality, making it difficult for the two companies' stock prices to benefit from the impressive results. Goldman Sachs expects both stocks to face downward pressure after the earnings release.

Specifically, Western Digital's Q2 revenue was $3.747 billion, a year-over-year increase of 43.8%, with a gross profit margin of 54.4% and non-GAAP EPS of $3.56, all exceeding expectations. However, its Q3 guidance failed to surprise, and Goldman Sachs maintained a "Neutral" rating and a target price of $650.

SanDisk's Q2 revenue was $8.965 billion, a substantial year-over-year increase of 371.6%, and non-GAAP EPS of $39.25, also significantly exceeding expectations. However, its Q3 revenue guidance midpoint of $10.55 billion was lower than Goldman Sachs' and market consensus forecasts, and its gross profit margin guidance was also below expectations, disappointing the market. Goldman Sachs maintained a "Buy" rating and a target price of $2,200.

Goldman Sachs also noted that given the high overlap in end-market exposure between Micron Technology (Micron) and SanDisk, the negative reaction to SanDisk's earnings is expected to spill over to Micron, and investors should pay attention to the short-term trend of Micron's stock price.