SAN JOSE, California, May 5, 2026, 11:05 PDT
Western Digital jumped roughly 6% to $469.44 late Tuesday morning. Shares opened at $455.61 and peaked at $479.94, putting the hard-drive maker within striking distance of $500 and shrugging off selling that hit after last week’s stronger-than-expected results.
What’s changed: investors aren’t lumping Western Digital in with old-school PC storage names anymore. They’re tagging hard disk drives—HDDs, the magnetic storage workhorses known for high capacity and low cost—as critical infrastructure for AI-fueled data centers. That’s where cloud players have to stash the mountains of data spun out by AI models.
Western Digital posted a 45% jump in fiscal third-quarter revenue to $3.34 billion, surpassing consensus. Adjusted earnings came in at $2.72 a share. Wall Street had been looking for $3.25 billion and $2.39 a share, respectively. For the fourth quarter, Western Digital projected revenue of $3.65 billion, give or take $100 million—well ahead of the $3.46 billion analysts had penciled in, according to Reuters.
Chief Executive Irving Tan pointed out that gross margin “exceeded 50%,” calling the demand story “clear.” Operating cash flow landed at $1.12 billion, while free cash flow—after capital expenses—came in at $978 million. The board bumped up the quarterly dividend 20%, now set at 15 cents per share. Western Digital Corporation
CFO Kris Sennesael said the business “continues to strengthen” and noted “visibility extending.” WD’s fourth-quarter guidance calls for revenue around $3.65 billion at the midpoint, a non-GAAP gross margin of 51.5%, and adjusted earnings pegged at $3.25 a share. Western Digital Corporation
The initial numbers left investors unimpressed. Shares of storage companies dropped post-earnings—plenty had hoped for stronger signals after the sector’s surge. Michael Ashley Schulman, a partner at Cerity Partners, said Western Digital and Sandisk just didn’t deliver the “wow factor” needed to sustain their rally. Reuters
Analysts continued to lift their targets. Rosenblatt’s Kevin Cassidy bumped his Western Digital price target up to $500 from the previous $340, sticking with a Buy rating. Cassidy noted Western Digital had turned in “another strong beat-and-raise” quarter, with gross margins topping 50%. TipRanks
Cloud dominates Western Digital’s business at this point, pulling in 89% of revenue, according to StorageNewsletter. Client and consumer segments trailed far behind at just 5% and 6%. StorageNewsletter also noted that Western Digital, along with Seagate and Toshiba, has been riding the wave of higher prices in mass storage.
The peer setup sheds some light on what’s driving the bid. Seagate turned in fiscal Q3 revenue of $3.11 billion, with non-GAAP gross margin at 47.0% and adjusted EPS of $4.10. For the fourth quarter, the company is aiming for $3.45 billion in revenue and $5.00 a share in adjusted earnings. Sandisk—spun off from Western Digital in 2025—also put out a fourth-quarter revenue forecast beating expectations, thanks to persistent demand for AI data-center storage.
It’s the stock’s valuation that’s got investors uneasy, not whether demand holds up this quarter. 24/7 Wall St. has pegged Western Digital with a $512.93 target. Still, they’ve flagged a downside scenario at $370.77—risks include cloud customers pulling back, margin pressure, tariffs, or NAND flash memory edging out HDDs at the top tier.
Right now, Western Digital is getting treated by the market as if it’s riding the AI infrastructure wave—pricing power, supply constraints, all of it. That setup carries some upside, but it doesn’t leave much tolerance for an unremarkable quarter.
