Western Digital Corp. and Sandisk Corp. delivered stellar earnings and revenue beats thanks to the skyrocketing price of memory chips and other compute infrastructure amid a global supply crunch.

Both companies crushed Wall Street’s expectations as the artificial intelligence boom continues to gobble up memory as fast as they can make it.

Western Digital reported adjusted third-quarter earnings of $2.72 per share, up from just $1.36 per share a year ago and well above Wall Street’s forecast of $2.39 per share. The company’s revenue grew 45% from a year earlier, to $3.34 billion, easily beating the analyst consensus estimate of $3.25 billion.

Sandisk’s results were even more explosive. The company delivered adjusted earnings of $23.41 per share, well ahead of the consensus view of $14.62 per share. Meanwhile its revenue soared by 251% from a year earlier, to $5.95 billion, crushing the Street’s $4.72 billion target.

Looking to its fiscal fourth quarter, Western Digital said it’s expecting more of the same, with revenue likely to grow by between 36% and 44% to around $3.65 billion at the midpoint of its guidance range. It’s also forecasting earnings of about $3.25 per share. In contrast, the Street is calling for a fourth-quarter profit of just $2.75 per share on $3.46 billion in sales.

Western Digital Chief Executive Irving Tan said the demand drivers for his company are clear. “Virtiually every AI workload, from training, inference, agentic AI to physical AI, creates data that is stored persistently and cost-efficiently on HDDs,” he said, referring to the company’s hard-drive disk products.

Data storage and memory supplier companies have been on a tear so far this year, thanks to the surging demand for their products triggered by the AI boom. Western Digital’s stock is up 152% in the year to date, while Sandisk’s shares have climbed 362%. Another storage firm, Seagate Technology Inc., is up 145% so far this year, while Micron Technology Inc. has risen 81%. On Tuesday, Seagate crushed the Street’s expectations when it reported its own earnings results and issued strong guidance for the current quarter.

That said, it seems that investors were either hoping for even stronger numbers, or else they were just taking profits, for both Western Digital’s and Sandisk’s stocks declined in late trading today. Western Digital was down more than 6%, while Sandisk fell 4% after-hours.

This isn’t the only blip these companies have faced. Earlier this week, a Wall Street Journal report came out that said OpenAI Group PBC had missed a number of growth targets relating to ChatGPT, triggering a brief selloff in companies related to the AI compute boom. However, they bounced back in the wake of Seagate’s report.

Sandisk CEO David Goeckeler told analysts he’s confident that the good times are going to continue for his company for the foreseeable future. “This quarter marks a fundamental inflection point for Sandisk — where our technology leadership is enabling a deliberate shift in our mix toward the highest-value end markets,” he said. He added that the company is shifting to a new business model based on “multiyear customer engagements backed by firm financial commitments,” and said this should enhance its earnings power.

For the current quarter, Sandisk is guiding for sales of between $7.8 billion and $8.3 billion, well ahead of the Street’s consensus model of $6.6 billion.

Sandisk is one of the world’s leading suppliers of both memory chips and high-speed flash storage, which are critical components in AI servers. Four companies – Amazon.com Inc., Alphabet Inc., Microsoft Corp. and Meta Platforms Inc. – have committed to spending over $700 billion on building AI data centers this year, and Sandisk is set to become one of the major beneficiaries of that largesse.

Goeckeler said the company is racing to beef up its manufacturing capacity to try and meet the rising demand from AI customers, but he said most of its new production lines won’t come online until the middle of next year. As a result, he expects memory and flash inventories to remain tight, likely driving further price increases.

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