Western Digital Corporation

(NASDAQ Global Select)
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Bullish +55

What Could Lift Western Digital Stock? | Trefis

Earnings report Financial outlook AI-generated analysis

πŸ“ˆ WDC stock returned 217.1% in the year to October 29, 2026, though shares have since lost 27.4%.

☁️ Cloud revenue comprised 88% of Western Digital's total revenue in fiscal Q1 2027 and rose 54% year-over-year.

πŸ’Ύ The company delivered 22% more exabytes of storage and increased average price per terabyte by 28% in fiscal Q1 2027.

πŸš€ Management expects faster exabyte supply growth through fiscal 2028 as it moves to new HAMR products.

πŸ’° Western Digital issued a revenue guide for fiscal Q2 2027 that is up approximately 69% from a year earlier.

⚠️ The company faces higher costs for DRAM and NAND components used inside its hard disks.

πŸ“‰ Trefis models WDC shares could be worth 44.9% more than the October 29 close in three years under specific growth assumptions.

πŸ“Š Western Digital's current twelve-month operating margin is the highest recorded since fiscal Q2 2017.

πŸ” The diluted share count rose 18.9% between fiscal Q1 2024 and fiscal Q1 2027, potentially diluting per-share value.

πŸ“… Western Digital is expected to report earnings in January 2027 with cloud revenue growth being a key metric.

Bullish Signals
  • Cloud revenue made up 88% of total revenue in fiscal Q1 2027 and rose 54% from a year earlier.
  • The company delivered 22% more exabytes of storage and raised average price per terabyte by 28% in fiscal Q1 2027.
  • Management expects faster exabyte supply growth through fiscal 2027 and 2028 as it moves to new HAMR products.
  • Western Digital issued a revenue guide for fiscal Q2 2027 that is up about 69% from a year earlier at the midpoint.
  • Western Digital's current twelve-month operating margin is the highest recorded at any of its 40 fiscal quarter ends dating back to fiscal Q2 2017.
Risk Factors
  • Shares have lost 27.4% since July 31, indicating recent market weakness despite strong year-to-date performance.
  • The company faces higher costs for the DRAM and NAND inside its hard disks which could impact margins.
  • About $4.8 billion of its twelve-month net profit came from non-operating income rather than core business operations.
  • The diluted share count rose 18.9% between fiscal Q1 2024 and fiscal Q1 2027, leaving each share with less value.
  • A P/E of 8.6 three years out would produce zero return for shareholders under the modeled assumptions.
Full Analysis
Western Digital (WDC) stock has experienced significant volatility, returning 217.1% year-to-date as of October 29, 2026, before dropping 27.4% since late July. The article analyzes the specific business drivers required to sustain share price growth, focusing heavily on the company's cloud storage segment which accounted for 88% of revenue in fiscal Q1 2027. Management reported a 54% year-over-year increase in cloud revenue driven by demand for high-capacity nearline hard disks. The company delivered 22% more exabytes of storage and raised average prices per terabyte by 28% in the same quarter, contributing to a 55.5% overall revenue rise. Future growth is anticipated through new HAMR products expected to ship in volume during the first half of calendar 2027. Trefis models WDC's potential upside based on sustaining high revenue growth rates, projecting shares could be worth 44.9% more than their October close over three years if revenue grows at a capped 30% annually. However, the analysis highlights risks including rising costs for internal DRAM and NAND components, potential margin compression, and valuation concerns if non-operating income declines or growth slows significantly. Investors are advised to monitor cloud revenue growth specifically in the upcoming January 2027 earnings report as a key indicator of continued momentum. While current operating margins remain at historic highs, the scenario assumes a lower multiple three years out due to slower projected growth compared to recent performance.