Western Digital (NASDAQ:WDC) Announces Quarterly Earnings Results

Western Digital (NASDAQ:WDC) posted its quarterly earnings results on Thursday. The data storage provider reported $2.13 earnings per share for the quarter, beating analysts’ consensus estimates of $1.93 by $0.20, FiscalAI reports. Western Digital had a return on equity of 44.67% and a net margin of 35.52%.The business had revenue of $3.02 billion for the quarter, compared to analysts’ expectations of $2.93 billion. During the same quarter in the prior year, the business earned $1.77 EPS. The firm’s revenue for the quarter was up 25.2% on a year-over-year basis.

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

• Western Digital beat expectations in Q2, reporting $3.0B revenue (up 25% YoY), $2.13 EPS (up 78% YoY) and a 46.1% gross margin, and guiding Q3 revenue of ~$3.2B with 47%–48% gross margin.
• Demand remained strong and visible—215 EB shipped (up 22% YoY), cloud was 89% of revenue, >3.5M latest-generation ePMR drives shipped (up to 32TB), UltraSMR mix crossed 50% and major customers have firm POs and multi-year LTAs through 2026–2028.
• HAMR and next‑gen ePMR momentum accelerated: company began HAMR and next‑gen ePMR qualifications with hyperscalers, acquired laser/IP assets to support HAMR, and expects HAMR ramp (targeted start CY2027) to be neutral-to-accretive to gross margins.
• Strong cash generation and shareholder returns: Q2 free cash flow was $653M, net liquidity $3.2B, $615M of buybacks this quarter (part of a $2B program), $1.4B returned since Q4 FY25, and a new quarterly dividend of $12.50 per share; remaining SanDisk shares are planned to be monetized to reduce debt.

Western Digital Stock Down 10.1%

Shares of NASDAQ WDC traded down $28.18 during trading on Friday, hitting $250.23. The stock had a trading volume of 21,637,548 shares, compared to its average volume of 9,203,390. Western Digital has a 12 month low of $28.83 and a 12 month high of $285.42. The company has a debt-to-equity ratio of 0.42, a current ratio of 1.21 and a quick ratio of 0.94. The firm has a fifty day moving average of $193.60 and a two-hundred day moving average of $136.62. The company has a market capitalization of $85.55 billion, a PE ratio of 25.10, a PEG ratio of 1.33 and a beta of 1.78.

Western Digital Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, March 18th. Shareholders of record on Thursday, March 5th will be issued a dividend of $0.125 per share. This represents a $0.50 dividend on an annualized basis and a yield of 0.2%. The ex-dividend date of this dividend is Thursday, March 5th. Western Digital’s payout ratio is currently 5.02%.

Insiders Place Their Bets

In other Western Digital news, Director Roxanne Oulman sold 1,800 shares of the business’s stock in a transaction on Tuesday, November 25th. The stock was sold at an average price of $154.42, for a total value of $277,956.00. Following the sale, the director directly owned 3,863 shares in the company, valued at $596,524.46. The trade was a 31.79% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, insider Cynthia L. Tregillis sold 2,801 shares of the business’s stock in a transaction dated Tuesday, December 2nd. The shares were sold at an average price of $160.57, for a total value of $449,756.57. Following the completion of the sale, the insider owned 144,596 shares in the company, valued at $23,217,779.72. This represents a 1.90% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 26,816 shares of company stock valued at $4,116,148. Insiders own 0.18% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the stock. Sivia Capital Partners LLC purchased a new position in Western Digital in the second quarter worth $307,000. SIH Partners LLLP bought a new position in Western Digital during the 3rd quarter worth approximately $217,000. Quadcap Wealth Management LLC purchased a new position in shares of Western Digital in the third quarter worth $236,000. Brown Brothers Harriman & Co. raised its stake in shares of Western Digital by 108.5% during the third quarter. Brown Brothers Harriman & Co. now owns 1,745 shares of the data storage provider’s stock valued at $210,000 after acquiring an additional 908 shares during the last quarter. Finally, Evergreen Capital Management LLC bought a new position in Western Digital during the 2nd quarter valued at approximately $265,000. 92.51% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

A number of research firms have recently weighed in on WDC. Citigroup lifted their price target on shares of Western Digital from $200.00 to $280.00 and gave the company a “buy” rating in a research report on Tuesday, January 20th. Morgan Stanley increased their target price on shares of Western Digital to $306.00 and gave the stock an “overweight” rating in a report on Friday. Wedbush increased their price target on Western Digital to $325.00 and gave the company an “outperform” rating in a research note on Friday. TD Cowen lifted their target price on shares of Western Digital from $200.00 to $325.00 and gave the stock a “buy” rating in a research report on Friday. Finally, UBS Group set a $306.00 target price on Western Digital in a report on Friday. One analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average target price of $244.95.

Key Headlines Impacting Western Digital

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

• Positive Sentiment: Q2 results beat and upbeat guidance — WDC reported $2.13 EPS vs. ~$1.93 consensus and revenue of $3.02B (+25% Y/Y); management guided Q3 well above Street estimates, citing strong demand from AI/data center customers. Western Digital Reports Fiscal Second Quarter 2026 Financial Results
• Positive Sentiment: Analysts turn more bullish — several firms upped ratings/targets (Wells Fargo $335, Wedbush $325, TD Cowen to $325, Morgan Stanley, Citi maintain/raise Buy calls), reflecting expectations for sustained AI-led capacity demand and margin upside. Analyst Coverage & Price Target Changes
• Positive Sentiment: Management and CEO comments highlight AI-driven storage growth — CEO Irving Tan emphasized that AI inference is generating more data and requiring more storage, supporting ongoing demand for high‑capacity HDDs and flash. Western Digital CEO: AI inference is generating more data and requiring storage hence demand growth
• Positive Sentiment: Company to outline AI storage roadmap at Feb. 3 Innovation Day — investors have an upcoming event to get product/roadmap detail, which could provide further visibility on TAM and upside. Dear Western Digital Stock Fans, Mark Your Calendars for February 3
• Neutral Sentiment: Small quarterly dividend declared — WDC announced a $0.125 per‑share dividend (ex‑dividend Mar 5), a token yield that is unlikely to materially move the stock but may be noted by income investors.
• Negative Sentiment: Shares gave back gains after the initial rally — despite the beat and strong guide, intraday profit‑taking and repositioning pushed the stock down on elevated volume, suggesting some investors are booking gains after a rapid run. Western Digital Shares Give Up Gains After Earnings Beat, Strong Guidance
• Negative Sentiment: Technical/positioning risks — some analysts and market pieces noted WDC was overbought ahead of results; after a big run to an all‑time high, elevated expectations increase the risk of short‑term pullbacks. Overbought Ahead of Earnings

Western Digital Company Profile

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.