Western Digital (NASDAQ:WDC) Posts Earnings Results, Beats Expectations By $0.33 EPS

Western Digital (NASDAQ:WDC) issued its quarterly earnings data on Thursday. The data storage provider reported $2.72 EPS for the quarter, topping analysts’ consensus estimates of $2.39 by $0.33, FiscalAI reports. Western Digital had a net margin of 55.29% and a return on equity of 49.24%. The business had revenue of $3.34 billion for the quarter, compared to analyst estimates of $3.25 billion. During the same period last year, the business posted $1.36 earnings per share. The firm’s quarterly revenue was up 45.5% on a year-over-year basis. Western Digital updated its Q4 2026 guidance to 3.100-3.400 EPS.

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

• WD reported a strong quarter with $3.3B revenue (+45% YoY), $2.72 EPS (?+97% YoY), 50.5% gross margin, and 222 exabytes shipped (+34% YoY), all above guidance.
• Management sees AI-driven secular tailwinds — agentic AI, inference, synthetic and physical AI — driving persistent storage needs and expects >25% long?term exabyte CAGR.
• Product roadmap momentum — 40TB EPMR on track for H2 CY2026 volume, 44TB HAMR in qualification with four customers, and expanding UltraSMR adoption across major customers.
• Financial position strengthened — monetized SanDisk to cut ~$3.1B debt, achieved investment?grade upgrades, ended with net cash ?$450M, generated ~$978M free cash flow, raised dividend 20% and repurchased $752M of stock.
• HAMR is still in customer qualification with no explicit shipment share targets and ongoing yield/reliability work, creating execution risk and a phased adoption timeline for higher?density supply.

Western Digital Stock Down 0.6%

Western Digital stock opened at $432.03 on Friday. The company has a market cap of $146.48 billion, a P/E ratio of 43.33, a price-to-earnings-growth ratio of 0.90 and a beta of 2.10. Western Digital has a 1-year low of $43.60 and a 1-year high of $446.62. The company has a fifty day simple moving average of $314.33 and a 200 day simple moving average of $233.19. The company has a current ratio of 1.46, a quick ratio of 1.19 and a debt-to-equity ratio of 0.34.

Western Digital Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, June 17th. Investors of record on Friday, June 5th will be given a $0.15 dividend. This represents a $0.60 dividend on an annualized basis and a yield of 0.1%. This is an increase from Western Digital’s previous quarterly dividend of $0.13. The ex-dividend date of this dividend is Friday, June 5th. Western Digital’s payout ratio is 5.02%.

Insider Activity

In other news, insider Vidyadhara K. Gubbi sold 10,148 shares of Western Digital stock in a transaction dated Wednesday, March 4th. The shares were sold at an average price of $270.31, for a total value of $2,743,105.88. Following the completion of the transaction, the insider owned 107,794 shares of the company’s stock, valued at $29,137,796.14. This trade represents a 8.60% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Cynthia L. Tregillis sold 9,324 shares of Western Digital stock in a transaction dated Wednesday, March 4th. The shares were sold at an average price of $268.27, for a total transaction of $2,501,349.48. Following the completion of the transaction, the insider directly owned 121,682 shares of the company’s stock, valued at approximately $32,643,630.14. This trade represents a 7.12% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 92,711 shares of company stock worth $24,300,404. Insiders own 0.18% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the company. Rakuten Securities Inc. grew its position in shares of Western Digital by 4,070.0% in the 2nd quarter. Rakuten Securities Inc. now owns 417 shares of the data storage provider’s stock valued at $27,000 after acquiring an additional 407 shares during the period. Swiss RE Ltd. bought a new position in shares of Western Digital in the 4th quarter valued at about $32,000. JPL Wealth Management LLC bought a new position in shares of Western Digital in the 3rd quarter valued at about $33,000. BOKF NA boosted its holdings in shares of Western Digital by 6,700.0% during the 3rd quarter. BOKF NA now owns 272 shares of the data storage provider’s stock worth $33,000 after buying an additional 268 shares during the period. Finally, Transamerica Financial Advisors LLC boosted its holdings in shares of Western Digital by 77.0% during the 4th quarter. Transamerica Financial Advisors LLC now owns 308 shares of the data storage provider’s stock worth $53,000 after buying an additional 134 shares during the period. Institutional investors own 92.51% of the company’s stock.

Western Digital News Summary

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

• Positive Sentiment: WDC beat expectations: Q3 EPS $2.72 and revenue $3.34B, both above consensus, and management raised FY?Q4 guidance (EPS and revenue) — this underpins the bullish case for continued AI/cloud storage demand. Earnings & press materials
• Positive Sentiment: Multiple analyst upgrades/target raises followed the quarter — Citi hiked its target to $500 (Buy) citing stronger visibility into AI-driven HDD demand, lifting investor optimism. Citi raises target to $500
• Positive Sentiment: Other firms (Rosenblatt, TD Cowen and others) boosted targets or reiterated Buy as AI/data?center demand drives margin expansion and share?buyback capacity; the company also announced a quarterly dividend increase, signalling confidence in cash flow.
• Neutral Sentiment: Industry signal — peers (SanDisk/Seagate) also reported strong results and demand commentary, confirming sector?wide AI storage tailwinds but raising questions about how much of that is already priced in. Reuters: sector demand
• Negative Sentiment: Market reaction was mixed — the stock slipped after the beat as some traders engaged in “buy the rumor, sell the news” profit?taking following an enormous YTD run; elevated expectations mean strong results may not produce further immediate upside. Yahoo: stock falls despite beat
• Negative Sentiment: Not all analyst moves are bullish: UBS raised its target to $375 but kept a Neutral rating — that level implies downside from current prices and provides a near?term anchor for traders focused on risk management. Benzinga: UBS target

Wall Street Analysts Forecast Growth

A number of equities research analysts recently commented on WDC shares. Mizuho set a $470.00 price objective on shares of Western Digital in a report on Friday. Susquehanna restated a “neutral” rating and set a $285.00 price objective on shares of Western Digital in a report on Friday, February 6th. Citigroup raised their price objective on shares of Western Digital from $405.00 to $500.00 and gave the stock a “buy” rating in a report on Friday. New Street Research set a $250.00 price objective on shares of Western Digital in a report on Tuesday, February 3rd. Finally, Bank of America raised their price objective on shares of Western Digital to $495.00 and gave the stock a “buy” rating in a report on Monday, April 27th. Eighteen investment analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, Western Digital has a consensus rating of “Moderate Buy” and an average price target of $389.74.

About Western Digital

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.