Sandisk and Western Digital delivered strong quarterly results, but investors remained unimpressed, raising questions about whether market capital is beginning to rotate away from AI-linked stocks and toward other asset classes, including crypto.

Shares of Sandisk (SNDK) and Western Digital (WDC), two major winners from the AI-driven demand for storage technology, dropped about 10% in pre-market trading Thursday despite both companies exceeding earnings expectations.

Sandisk reported record fourth-quarter revenue of $8.97 billion and adjusted earnings of $39.25 per share, beating forecasts by a wide margin. Western Digital also posted a strong quarter, generating $3.75 billion in revenue, a 44% year-over-year increase, while gross margins climbed to 54.4%. However, both stocks remain approximately 50% below their previous all-time highs.

The selloff was largely linked to future expectations rather than current results. Sandisk’s first-quarter revenue outlook came in below analyst estimates, with the company projecting $10.7 billion compared with the $11.2 billion expected by Wall Street. Its earnings forecast also fell short. Western Digital’s guidance was stronger, but after an extraordinary 500% rally, investors were looking for another major upside surprise.

Over the past year, Sandisk shares have surged more than 3,000%, while Western Digital has gained over 550%, fueled by the AI infrastructure boom. During the same period, cryptocurrencies and precious metals have struggled to match the performance of AI-related equities.

Sandisk also expanded its capital return plans, with its board approving an additional $14 billion share repurchase program, increasing its total buyback authorization to $15.5 billion.

With momentum in the AI trade beginning to slow, some investors are watching for signs of a broader shift in capital allocation. Gold has climbed more than 7% in recent days, while bitcoin continues to trade above $64,000 and has shown little impact from the Coldcard wallet exploit.

Crypto investors may view these developments as evidence that market leadership could be changing. The dominant narrative in recent months has been that investors have redirected funds into AI stocks, leaving bitcoin among the major assets losing capital. If the AI rally continues to cool, cryptocurrencies could benefit from renewed investor attention.