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

Western Digital (NASDAQ:WDC) issued its quarterly earnings results on Thursday. The data storage provider reported $4.64 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.11 by $0.53, FiscalAI reports. Western Digital had a net margin of 72.95% and a return on equity of 48.15%. The company had revenue of $4.38 billion during the quarter, compared to analyst estimates of $4.14 billion. During the same period last year, the business earned $1.78 EPS. Western Digital’s quarterly revenue was up 55.5% compared to the same quarter last year.

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 Price Performance

Shares of WDC stock traded up $0.58 during mid-day trading on Friday, hitting $354.77. 3,479,175 shares of the stock traded hands, compared to its average volume of 8,632,979. The stock has a market cap of $132.80 billion, a P/E ratio of 14.54, a P/E/G ratio of 1.60 and a beta of 2.11. Western Digital has a 52-week low of $121.85 and a 52-week high of $799.87. The stock’s fifty day moving average is $435.48 and its two-hundred day moving average is $480.46.

Western Digital Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, December 17th. Shareholders of record on Friday, December 4th will be issued a $0.1750 dividend. This is a boost from Western Digital’s previous quarterly dividend of $0.15. This represents a $0.70 dividend on an annualized basis and a yield of 0.2%. The ex-dividend date is Friday, December 4th. Western Digital’s dividend payout ratio is presently 2.48%.

Insider Buying and Selling

In other Western Digital news, insider Cynthia L. Tregillis sold 1,007 shares of the business’s stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $478.36, for a total value of $481,708.52. Following the completion of the transaction, the insider directly owned 112,155 shares of the company’s stock, valued at approximately $53,650,465.80. The trade was a 0.89% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara K. Gubbi sold 1,795 shares of Western Digital stock in a transaction on Friday, September 4th. The shares were sold at an average price of $459.87, for a total transaction of $825,466.65. Following the completion of the transaction, the insider directly owned 80,571 shares of the company’s stock, valued at $37,052,185.77. The trade was a 2.18% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 25,436 shares of company stock worth $11,340,064 in the last 90 days. Insiders own 0.20% of the company’s stock.

Trending Headlines about Western Digital

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

• Positive Sentiment: Western Digital reported fiscal Q1 2027 adjusted earnings of $4.64 per share and revenue of $4.38 billion, exceeding estimates of roughly $4.09–$4.14 billion. Revenue grew 55.5% year over year, driven by data-center demand and stronger pricing. Western Digital earnings report
• Positive Sentiment: Management’s fiscal Q2 outlook was also strong, calling for approximately $5.1 billion in revenue and adjusted EPS of $5.80, plus or minus $0.20. Gross margins are expected to approach 60%, suggesting continued hard-drive pricing power. Western Digital results and guidance
• Positive Sentiment: Western Digital generated about $1.38 billion in free cash flow and raised its quarterly dividend 16.7% to $0.175 per share. Management also said AI inference, robotics and cloud workloads are supporting long-term storage demand, with visibility extending into 2030–2031. Western Digital storage demand outlook
• Neutral Sentiment: Analysts remain bullish overall, but several firms lowered their price targets while maintaining positive ratings. Rosenblatt cut its target to $650 with a “buy” rating, and Cantor Fitzgerald reduced its target to $625 while retaining an “overweight” rating. Rosenblatt analyst action
• Negative Sentiment: The earnings beat failed to sustain gains as investors questioned higher capital expenditures, potential supply growth, inventory levels and execution risks surrounding the HAMR technology transition. Concerns about hyperscaler spending may be weighing on the entire AI infrastructure group.
• Negative Sentiment: Western Digital is also being dragged lower by a broad AI, semiconductor and memory-stock sell-off. After a major prior rally, investors may be taking profits and demanding stronger evidence that current growth and pricing strength can persist.
• Negative Sentiment: An insider disclosed a sale of 807 shares worth approximately $306,660 under a pre-arranged Rule 10b5-1 plan. The transaction is small relative to the insider’s remaining holdings, but it adds a modest sentiment overhang. SEC insider filing

Analyst Upgrades and Downgrades

Several equities analysts recently issued reports on the company. Robert W. Baird set a $900.00 price objective on Western Digital in a research report on Friday. Cantor Fitzgerald lowered their target price on Western Digital from $900.00 to $625.00 and set an “overweight” rating on the stock in a research report on Friday. Melius Research set a $1,050.00 price objective on shares of Western Digital and gave the stock a “buy” rating in a research note on Monday, June 29th. Wedbush upped their price target on Western Digital from $540.00 to $650.00 and gave the stock an “outperform” rating in a research note on Monday, July 27th. Finally, TD Cowen decreased their target price on Western Digital from $540.00 to $430.00 and set a “buy” rating on the stock in a research report on Friday. One analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating and six have given a Hold rating to the company’s stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and an average target price of $589.37.

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.