Perfection dump
Also dumped on a beat. Unlike Bloom, the cash was real. This one was priced for perfection.
Cash confirms the beat. The stock was already priced for it.
Thursday close $354.19, down 6.4% from $378.51, then about $337 after hours, roughly 11% under Wednesday's close. Shares were already up about 106% in 2026.
Before the print
- Already priced — Up about 106% in 2026 before this print. Q2 guide (revenue $5.0–$5.2B, adjusted EPS $5.60–$6.00) was strong and still got sold. The beat was the expected case.
- Retail bid — Retail attention in memory is in SanDisk (the spin) and Micron, not in this HDD print. A fully priced beat had less of a chase.
In the release
- Cash vs profit — Adjusted EPS $4.64 versus a $4.08 street number, revenue $4.38B. Operating cash flow $1.60B and free cash flow $1.38B. The quarterly dividend went up 17% to $0.175. Profit showed up as cash.
- Gross margin — Non-GAAP gross margin 58.1%, from 43.9% a year ago. Next-quarter guide is 60–61%. Margin is expanding, not capped.
- Capex and AI-spend doubts — Capex more than tripled in the quarter and free-cash-flow margin compressed about 3 points. Spending runs modestly above the 4–6% of revenue range for the next two years. The question is whether AI-storage pricing lasts, not whether this quarter's earnings were uncollected.