Western Digital (NASDAQ:WDC) Announces Earnings Results

Western Digital (NASDAQ:WDC) issued its earnings results on Thursday. The data storage provider reported $4.64 earnings per share for the quarter, topping the consensus estimate of $4.11 by $0.53, FiscalAI reports. Western Digital had a return on equity of 48.15% and a net margin of 72.95%. The company had revenue of $4.38 billion for the quarter, compared to analyst estimates of $4.14 billion.

Here are the key takeaways from Western Digital’s conference call:

• Strong first-quarter performance: Revenue rose 55% year over year to $4.4 billion, gross margin expanded to 58.1%, EPS increased 161% to $4.64, and free cash flow reached $1.4 billion.
• Management raised its near-term outlook substantially, guiding for second-quarter revenue of $5.1 billion at the midpoint, up 69% year over year, with gross margin expected at 60%–61% and EPS of $5.80 ± $0.20.
• Demand for high-capacity HDDs remains robust, with visibility for major customers extending through 2030–2031. WD cited accelerating storage needs from cloud, AI inference, agentic AI, physical AI, enterprise, and NeoCloud customers.
• The product roadmap is progressing, including rapid adoption of 40-terabyte ePMR drives and planned HAMR volume shipments in the first half of calendar 2027. Exabyte growth is expected to accelerate through fiscal 2027 and 2028.
• WD plans to invest above its typical 4%–6% of revenue CapEx range over the next two years for HAMR-related heads and media technology and factory automation, while input-cost inflation for DRAM and NAND may temporarily limit cost-per-terabyte improvements.

Western Digital Trading Down 6.4%

NASDAQ WDC traded down $24.32 during trading on Thursday, hitting $354.19. 13,243,410 shares of the company traded hands, compared to its average volume of 8,666,783. Western Digital has a 12 month low of $121.71 and a 12 month high of $799.87. The business has a fifty day simple moving average of $438.14 and a 200 day simple moving average of $480.05. The company has a market capitalization of $132.58 billion, a P/E ratio of 14.63, a PEG ratio of 1.54 and a beta of 2.11.

Western Digital Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, September 17th. Shareholders of record on Tuesday, September 8th were issued a dividend of $0.15 per share. This represents a $0.60 annualized dividend and a yield of 0.2%. The ex-dividend date was Tuesday, September 8th. Western Digital’s dividend payout ratio (DPR) is 2.48%.

Trending Headlines about Western Digital

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital reported fiscal Q1 2027 revenue of $4.38 billion, up 55% year over year, while GAAP net income reached $1.78 billion and diluted EPS was $4.63. Non-GAAP EPS of $4.64 exceeded analyst expectations by approximately 13%. Western Digital surprises with strong Q3 but inventory levels increase
• Positive Sentiment: Management issued strong fiscal Q2 guidance, calling for revenue of about $5.1 billion and non-GAAP EPS of $5.80, both ahead of Wall Street expectations. Gross margin also improved substantially to 57.8% from 43.5% a year earlier. Western Digital Q1 Revenue Climbs 55% to $4.38 Billion
• Positive Sentiment: Western Digital raised its quarterly dividend 17% to $0.175 per share, while reporting $1.38 billion in free cash flow. The results reinforce the view that AI, cloud, and high-capacity storage demand are supporting pricing and profitability. Western Digital Profit Grows on Data Storage Demand
• Neutral Sentiment: The stock initially gained after the report but failed to hold those gains as investors focused on a severe technology and AI-sector selloff. Western Digital had already fallen sharply from its June peak, making the market particularly sensitive to guidance quality and forward demand signals. Western Digital beats earnings estimates, but AI selloff erases initial gains
• Negative Sentiment: Reports noted rising inventory levels, raising concerns that supply growth or weaker demand could eventually pressure pricing despite the upbeat near-term outlook. Analysts have also trimmed some fair-value estimates because of execution, HAMR technology-transition, and competitive-supply risks. Western Digital fair value trimmed as analysts weigh HDD demand and HAMR risks

Insider Transactions at Western Digital

In other news, CEO Irving Tan sold 20,000 shares of the stock in a transaction dated Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the transaction, the chief executive officer owned 575,966 shares of the company’s stock, valued at approximately $256,287,591.02. This represents a 3.36% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara Gubbi sold 1,795 shares of the business’s stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $459.87, for a total value of $825,466.65. Following the completion of the sale, the insider owned 80,571 shares of the company’s stock, valued at approximately $37,052,185.77. This trade represents a 2.18% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 24,629 shares of company stock worth $11,033,404. 0.20% of the stock is owned by corporate insiders.

Wall Street Analyst Weigh In

Several brokerages have recently issued reports on WDC. Robert W. Baird set a $630.00 price target on Western Digital in a report on Thursday, August 6th. Mizuho set a $590.00 price objective on Western Digital in a report on Thursday, August 6th. Melius Research set a $1,050.00 price objective on shares of Western Digital and gave the company a “buy” rating in a research report on Monday, June 29th. UBS Group cut their price objective on shares of Western Digital from $525.00 to $470.00 and set a “neutral” rating on the stock in a research report on Monday, October 12th. Finally, Citigroup reduced their target price on shares of Western Digital from $800.00 to $740.00 and set a “buy” rating for the company in a research note on Friday, August 7th. One equities research analyst has rated the stock with a Strong Buy rating, twenty have assigned a Buy rating and seven have issued a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus target price of $609.56.

About Western Digital

Western Digital Corporation (NASDAQ: WDC) is a data storage technology company that develops and manufactures hard disk drives (HDDs) and related storage solutions. Its products are used in data centers, cloud infrastructure, enterprise systems, personal computers, gaming platforms and external storage devices.

The company offers HDD-based products for business and consumer applications, including high-capacity drives designed for hyperscale and cloud data centers, enterprise storage environments, network-attached storage systems and personal computing.