Sandisk, Western Digital, and others soar as Micron results 'justify elevated valuations'

Micron reported fiscal 2025 revenue of $37.4B (+48.9% YoY) with 39.8% gross margins and $7.59 diluted EPS, a print strong enough to prompt analysts to argue that premium valuations across the memory complex are now supported by fundamentals. The results reflect sustained AI-driven demand for HBM and data-center NAND, and traders immediately rotated into the two closest comps: Western Digital (WDC) and the recently spun-out Sandisk (SNDK).

Western Digital posted its own impressive FY2025: $9.5B revenue (+50.7% YoY), 38.8% gross margins, and $5.12 diluted EPS — a trajectory nearly mirroring Micron's recovery. WDC is the cleaner secondary beneficiary: it has positive net income, comparable gross margins, and direct exposure to the same enterprise SSD and HDD upgrade cycle that is lifting the whole sector.

Sandisk is the more complicated story. Freshly spun out from Western Digital, it posted $7.4B in revenue but only +10.4% YoY growth, 30.1% gross margins, and a deeply negative net margin of -22.3% with -$11.32 diluted EPS. The spin-off carries restructuring costs and standalone overhead that depress earnings, meaning it is riding the sector halo more on sentiment than on its own fundamental trajectory.

The key question going forward is whether the AI-driven memory upcycle has legs into 2026 or whether the sector is now fully priced after a 50%+ revenue surge. Inventory normalization, China export restrictions, and capex discipline at hyperscalers are the main variables that could reverse the trade. Micron's next quarterly guide and WDC's upcoming earnings call are the nearest catalysts to watch.