Western Digital (NASDAQ:WDC) Stock Price Up 4% After Earnings Beat

Western Digital Corporation (NASDAQ:WDC)’s stock price traded up 4% on Tuesday following a better than expected earnings announcement. The stock traded as high as $559.84 and last traded at $548.56. Approximately 7,530,869 shares were traded during trading, a decline of 16% from the average session volume of 8,916,658 shares. The stock had previously closed at $527.22.

The data storage provider reported $3.56 earnings per share for the quarter, topping the consensus estimate of $3.31 by $0.25. Western Digital had a return on equity of 42.95% and a net margin of 55.29%.The company had revenue of $3.75 billion during the quarter, compared to the consensus estimate of $3.70 billion. During the same quarter last year, the business posted $1.66 earnings per share. Western Digital’s revenue was up 43.8% compared to the same quarter last year.

Western Digital Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 17th. Investors of record on Tuesday, September 8th will be paid a dividend of $0.15 per share. The ex-dividend date of this dividend is Tuesday, September 8th. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.1%. Western Digital’s dividend payout ratio (DPR) is presently 3.58%.

Key Stories Impacting Western Digital

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

• Positive Sentiment: Western Digital reported adjusted fourth-quarter earnings of $3.56 per share on $3.75 billion in revenue, exceeding consensus estimates of $3.31 EPS and $3.70 billion in revenue. Revenue increased 43.8% year over year, supported by cloud data-center and AI-related storage demand. Western Digital Q4 Earnings Beat as Revenue Jumps 44% on Cloud Demand
• Positive Sentiment: Management issued fiscal first-quarter 2027 revenue guidance of $4.0 billion to $4.2 billion and adjusted EPS guidance of $3.85 to $4.15, both above Wall Street expectations. Executives also said AI customers are negotiating storage capacity commitments extending through 2031, providing substantial long-term demand visibility. Western Digital Says AI Customers Are Already Negotiating Storage Deals Through 2031
• Neutral Sentiment: Analyst views were mixed. Robert W. Baird raised its price target to $630 and maintained a Buy rating, while Rosenblatt lowered its target to $800 but retained Buy; Summit Insights downgraded the stock from Buy to Hold. Western Digital also declared a $0.15-per-share quarterly dividend, although the approximately 0.1% yield is unlikely to materially affect the stock.
• Negative Sentiment: The main pressure point was fiscal first-quarter non-GAAP gross-margin guidance of 55% to 56%—a midpoint of 55.5%—which fell short of the higher profitability expectations set by Seagate’s recent results. Analysts viewed this as evidence that margin expansion may be stabilizing after a major rally. Western Digital Slumps Despite Q2 Beat as Analysts Highlight Peer Seagate’s Results
• Negative Sentiment: Investor expectations were unusually high after WDC’s shares had risen roughly threefold over the past year and AI-storage enthusiasm had driven the valuation higher. As a result, even an earnings beat and above-consensus revenue outlook were insufficient, prompting profit-taking and a broader selloff in storage and memory stocks.

Analyst Ratings Changes

A number of research analysts have issued reports on WDC shares. Fox Advisors lowered shares of Western Digital from an “overweight” rating to an “equal weight” rating in a report on Monday, June 22nd. Summit Insights downgraded shares of Western Digital from a “buy” rating to a “hold” rating in a report on Thursday. Citigroup boosted their price objective on shares of Western Digital from $685.00 to $800.00 and gave the company a “buy” rating in a research report on Monday, July 13th. Barclays upped their price objective on shares of Western Digital from $450.00 to $620.00 and gave the company an “overweight” rating in a research note on Wednesday, May 27th. Finally, Rosenblatt Securities decreased their target price on shares of Western Digital from $900.00 to $800.00 and set a “buy” rating on the stock in a research report on Thursday. Two research analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and five have given a Hold rating to the company. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $536.96.

Insiders Place Their Bets

In other Western Digital news, Director Bruce E. Kiddoo sold 750 shares of the firm’s stock in a transaction dated Thursday, May 28th. The stock was sold at an average price of $528.52, for a total value of $396,390.00. Following the sale, the director directly owned 3,903 shares of the company’s stock, valued at approximately $2,062,813.56. This trade represents a 16.12% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, insider Vidyadhara K. Gubbi sold 2,475 shares of Western Digital stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $556.24, for a total value of $1,376,694.00. Following the completion of the sale, the insider owned 85,154 shares of the company’s stock, valued at $47,366,060.96. This trade represents a 2.82% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 5,093 shares of company stock valued at $2,751,337. Insiders own 0.18% of the company’s stock.

Institutional Investors Weigh In On Western Digital

Institutional investors have recently bought and sold shares of the stock. Ares Financial Consulting LLC boosted its holdings in shares of Western Digital by 45.5% in the 2nd quarter. Ares Financial Consulting LLC now owns 80 shares of the data storage provider’s stock valued at $51,000 after purchasing an additional 25 shares during the last quarter. Dogwood Wealth Management LLC increased its holdings in shares of Western Digital by 28.6% during the 2nd quarter. Dogwood Wealth Management LLC now owns 90 shares of the data storage provider’s stock worth $57,000 after buying an additional 20 shares during the last quarter. Clearstead Trust LLC purchased a new position in shares of Western Digital in the 2nd quarter worth $59,000. Kelleher Financial Advisors purchased a new position in shares of Western Digital in the 2nd quarter worth $73,000. Finally, Valley Wealth Managers Inc. acquired a new position in Western Digital in the first quarter valued at $32,000. 92.51% of the stock is currently owned by hedge funds and other institutional investors.

Western Digital Stock Down 13.0%

The stock has a fifty day moving average of $569.14 and a two-hundred day moving average of $415.61. The stock has a market cap of $155.63 billion, a price-to-earnings ratio of 26.96 and a beta of 2.14.

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.