Key Highlights

  • Western Digital Corporation (NASDAQ:WDC) shares are up 161.78 percent year to date, among the largest annual moves in the storage hardware sector.
  • Fiscal 2026 Revenue grew 36 percent to $12.9 billion, with Earnings Per Share more than doubling to $10.22.
  • Fiscal Q4 revenue reached $3.75 billion, up 44 percent year over year, with gross Margin expanding to 54.4 percent.
  • The company is on track to ship its 44-terabyte HAMR product in the first half of calendar 2027.

Overview

Western Digital Corporation (NASDAQ:WDC) shares are up 161.78 percent year to date. The move has tracked the company's first full fiscal year as a standalone hard disk drive Business following the 2025 separation of its flash memory operations into Sandisk, with cloud storage Demand supporting expanding margins.

Western Digital is a San Jose, California-based company that designs and manufactures high-capacity hard disk drives, primarily serving cloud, enterprise and consumer storage markets.

Recent Developments

For fiscal 2026, Western Digital reported revenue growth of 36 percent to $12.9 billion, with gross margin expanding 970 basis points to 49.1 percent and earnings per share more than doubling to $10.22. Fourth-quarter revenue reached $3.75 billion, up 44 percent year over year, with gross margin of 54.4 percent, up more than 1,300 basis points, and free Cash Flow of $1.3 billion for the quarter.

Cloud customers represented 89 percent of fourth-quarter revenue at $3.3 billion, up 43 percent year over year. The company began shipping next-generation ePMR drives with capacities up to 40 terabytes during the quarter and entered Volume production with two customers. Blended average price per terabyte increased from high single digits in the prior quarter to high teens during the fourth quarter.

Catalysts to Watch

Western Digital is on track to ship its 44-terabyte HAMR product in the first half of calendar 2027, with customer qualification feedback described by the company as positive on capacity, performance and reliability. Management expects UltraSMR technology to represent around 60 percent of nearline exabyte shipments by the end of fiscal 2027, and has guided to exabyte demand growth above 25 percent going forward.

The company has said it is in discussions with customers to establish long-term Supply agreements extending to calendar years 2029 through 2031, reflecting what management described as strong customer-driven demand for extended pricing visibility. High-bandwidth drive sampling with five customers, targeting up to eight times the throughput of current drives, is an additional area of product development.

Sector Context and Risk Factors

As a supplier of hard disk drives concentrated in cloud and enterprise storage markets, Western Digital's results are tied to hyperscale Data Center Capital spending and the pace of technology transitions between drive capacity generations. The company has said long-term cost per terabyte is expected to decline on the order of 10 percent year over year, driven by transitions to higher areal density products.

Western Digital's first-quarter fiscal 2027 guidance calls for revenue of $4.1 billion, plus or minus $100 million, with gross margin in a range of 55 to 56 percent. Quarter-to-quarter variation in exabyte growth and gross margin, tied to customer product mix and the timing of long-term agreement pricing, remain factors the company has said to expect in its results.