Western Digital (NASDAQ:WDC) Releases Earnings Results, Beats Estimates By $0.53 EPS

Western Digital (NASDAQ:WDC) released its quarterly earnings results on Thursday. The data storage provider reported $4.64 EPS for the quarter, beating analysts’ consensus estimates of $4.11 by $0.53, FiscalAI reports. The company had revenue of $4.38 billion for the quarter, compared to analyst estimates of $4.14 billion. Western Digital had a net margin of 69.20% and a return on equity of 56.91%. The company’s quarterly revenue was up 55.5% compared to the same quarter last year. During the same quarter last year, the firm posted $1.78 earnings per share.

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 Stock Down 3.0%

Shares of WDC opened at $343.67 on Friday. The stock’s 50-day moving average price is $432.18 and its 200 day moving average price is $479.51. The firm has a market capitalization of $128.64 billion, a price-to-earnings ratio of 13.34, a P/E/G ratio of 1.50 and a beta of 2.11. Western Digital has a 12-month low of $121.85 and a 12-month high of $799.87.

Western Digital Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, December 17th. Investors of record on Friday, December 4th will be paid a dividend of $0.1750 per share. This is a positive change from Western Digital’s previous quarterly dividend of $0.15. This represents a $0.70 annualized dividend and a yield of 0.2%. The ex-dividend date is Friday, December 4th. Western Digital’s dividend payout ratio is presently 2.48%.

Insiders Place Their Bets

In other news, insider Vidyadhara K. 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 transaction of $825,466.65. Following the sale, the insider directly owned 80,571 shares in the company, valued at approximately $37,052,185.77. The trade was a 2.18% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, CEO Irving Tan sold 20,000 shares of the company’s stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $444.97, for a total value of $8,899,400.00. Following the completion of the transaction, the chief executive officer owned 575,966 shares of the company’s stock, valued at $256,287,591.02. The trade was a 3.36% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 25,436 shares of company stock worth $11,340,064. 0.20% of the stock is currently owned by company insiders.

Key Western Digital News

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

• Positive Sentiment: Western Digital reported fiscal Q1 2027 adjusted EPS of $4.64, above the roughly $4.09–$4.11 consensus, while revenue rose 55.5% year over year to $4.38 billion. Growth was driven by strong cloud and data-center demand, higher-capacity drives and improved pricing. Western Digital Q1 earnings and revenues beat estimates
• Positive Sentiment: Management issued substantially stronger-than-expected fiscal Q2 guidance, calling for revenue of approximately $5.0 billion to $5.2 billion and adjusted EPS of $5.60 to $6.00, versus consensus estimates near $4.5 billion and $4.72, respectively. Western Digital forecasts strong second-quarter growth
• Positive Sentiment: AI-related storage demand remains durable, with management citing growing requirements from inference, robotics and long-term data retention. Analysts and industry commentators expect HDDs to remain an important, cost-effective storage layer for data centers, potentially supporting demand visibility into 2030–2031. Western Digital CEO discusses durable AI storage demand
• Positive Sentiment: Western Digital generated about $1.38 billion in free cash flow and increased its quarterly dividend 16.7% to $0.175 per share. JPMorgan also raised its price target to $650 and maintained an overweight rating. Western Digital Q1 revenue and dividend update
• Neutral Sentiment: Other analysts remained bullish but reduced some price targets, reflecting elevated expectations and uncertainty around the pace of future growth. TD Cowen, for example, lowered its target to $430 while retaining a buy rating; Rosenblatt and Cantor Fitzgerald also cut targets but remained positive.
• Negative Sentiment: The stock’s strong results were not enough to overcome a broad sell-off in AI, memory and technology shares. Investors are questioning whether hyperscaler capital spending can remain elevated and whether Western Digital’s unusually strong HDD pricing and margins are sustainable.
• Negative Sentiment: Higher planned capital expenditures, possible industry supply increases, inventory concerns and execution risks surrounding the HAMR technology transition are weighing on sentiment. Management also acknowledged that HDD price growth could eventually moderate. Western Digital faces capex and supply concerns
• Negative Sentiment: A disclosed insider sale of 807 shares worth approximately $306,660 added a modest sentiment overhang, although it was conducted under a pre-arranged Rule 10b5-1 plan and represented only a small portion of the insider’s holdings. SEC insider transaction filing

Analysts Set New Price Targets

Several brokerages recently commented on WDC. Susquehanna set a $405.00 target price on shares of Western Digital in a report on Friday. Mizuho set a $490.00 price target on shares of Western Digital in a report on Friday. Sanford C. Bernstein raised their price target on Western Digital from $590.00 to $770.00 and gave the company an “outperform” rating in a research report on Thursday, August 6th. Summit Insights lowered Western Digital from a “buy” rating to a “hold” rating in a research note on Thursday, August 6th. Finally, TD Cowen dropped their price objective on Western Digital from $540.00 to $430.00 and set a “buy” rating on the stock in a research note on Friday. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating and six have issued a Hold rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and an average target price of $584.00.

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.