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

Western Digital (NASDAQ:WDC) announced its earnings results on Thursday. The data storage provider reported $4.64 earnings per share for the quarter, topping the consensus estimate of $4.11 by $0.53, FiscalAI reports. Western Digital had a return on equity of 48.15% and a net margin of 72.95%. The business had revenue of $4.38 billion during the quarter, compared to the consensus estimate of $4.14 billion.

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 6.4%

Shares of Western Digital stock traded down $24.32 on Thursday, hitting $354.19. 13,243,410 shares of the company were exchanged, compared to its average volume of 8,666,783. The stock has a market capitalization of $132.58 billion, a price-to-earnings ratio of 14.63, a price-to-earnings-growth ratio of 1.54 and a beta of 2.11. The company has a 50-day moving average price of $438.14 and a 200 day moving average price of $480.05. Western Digital has a 1-year low of $121.71 and a 1-year high of $799.87.

Western Digital Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th were issued a dividend of $0.15 per share. This represents a $0.60 annualized dividend and a dividend yield of 0.2%. The ex-dividend date was Tuesday, September 8th. Western Digital’s payout ratio is currently 2.48%.

Western Digital News Summary

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

• Positive Sentiment: Western Digital reported fiscal Q1 2027 revenue of $4.38 billion, up 55% year over year, while GAAP net income reached $1.78 billion and diluted EPS was $4.63. Non-GAAP EPS of $4.64 exceeded analyst expectations by approximately 13%. Western Digital surprises with strong Q3 but inventory levels increase
• Positive Sentiment: Management issued strong fiscal Q2 guidance, calling for revenue of about $5.1 billion and non-GAAP EPS of $5.80, both ahead of Wall Street expectations. Gross margin also improved substantially to 57.8% from 43.5% a year earlier. Western Digital Q1 Revenue Climbs 55% to $4.38 Billion
• Positive Sentiment: Western Digital raised its quarterly dividend 17% to $0.175 per share, while reporting $1.38 billion in free cash flow. The results reinforce the view that AI, cloud, and high-capacity storage demand are supporting pricing and profitability. Western Digital Profit Grows on Data Storage Demand
• Neutral Sentiment: The stock initially gained after the report but failed to hold those gains as investors focused on a severe technology and AI-sector selloff. Western Digital had already fallen sharply from its June peak, making the market particularly sensitive to guidance quality and forward demand signals. Western Digital beats earnings estimates, but AI selloff erases initial gains
• Negative Sentiment: Reports noted rising inventory levels, raising concerns that supply growth or weaker demand could eventually pressure pricing despite the upbeat near-term outlook. Analysts have also trimmed some fair-value estimates because of execution, HAMR technology-transition, and competitive-supply risks. Western Digital fair value trimmed as analysts weigh HDD demand and HAMR risks

Wall Street Analysts Forecast Growth

WDC has been the topic of several research reports. TD Cowen raised their target price on Western Digital from $500.00 to $540.00 and gave the company a “buy” rating in a research report on Thursday, August 6th. Bank of America boosted their price target on Western Digital from $720.00 to $800.00 and gave the stock a “buy” rating in a research report on Wednesday. Rosenblatt Securities dropped their price target on Western Digital from $900.00 to $800.00 and set a “buy” rating for the company in a research report on Thursday, August 6th. Wells Fargo & Company reduced their price objective on Western Digital from $730.00 to $450.00 and set an “overweight” rating for the company in a research note on Friday, October 16th. Finally, Wall Street Zen upgraded Western Digital from a “buy” rating to a “strong-buy” rating in a report on Saturday, October 17th. One investment analyst has rated the stock with a Strong Buy rating, twenty have issued a Buy rating and seven have given a Hold rating to the stock. According to MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $609.56.

Insider Activity at Western Digital

In other Western Digital news, insider Cynthia L. Tregillis sold 432 shares of the business’s stock in a transaction on Friday, September 4th. The stock was sold at an average price of $451.20, for a total transaction of $194,918.40. Following the transaction, the insider owned 111,030 shares of the company’s stock, valued at approximately $50,096,736. The trade was a 0.39% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara K. Gubbi sold 1,795 shares of the business’s stock in a transaction on Friday, September 4th. The stock was sold at an average price of $459.87, for a total value of $825,466.65. Following the transaction, the insider directly owned 80,571 shares in the company, valued at $37,052,185.77. This trade represents a 2.18% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 24,629 shares of company stock valued at $11,033,404. 0.20% of the stock is currently owned by insiders.

Western Digital Company Profile

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.