Western Digital shares tumbled 5.14% in intraday trading on Friday, adding to the sharp losses from the prior session that saw the memory-chip maker plunge more than 13% after its quarterly earnings report.
The sell-off was triggered by the company's forward guidance, which failed to meet the market's extremely elevated expectations despite delivering better-than-expected fiscal fourth-quarter results. Revenue came in at $3.747 billion, up 44% year-over-year, and adjusted earnings per share of $3.56 surpassed analyst estimates, but the outlook for the coming quarters underwhelmed investors who had priced in a more robust trajectory.
The stock's vulnerability was amplified by its staggering year-to-date gains of approximately 200% prior to the sell-off, leaving ample room for profit-taking once the guidance fell short. The broader memory-chip sector also came under pressure, with peers such as Seagate and Sandisk declining in sympathy, reflecting a broader market trend where even strong earnings are being met with selling if forward outlooks do not justify lofty valuations.