Western Digital Corporation

(NASDAQ Global Select)
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Somewhat Bullish +45

Western Digital or Micron? Jim Cramer Says “I Think Micron’s a Better Company.” Here’s the Test

Company update AI-generated analysis

📉 WDC stock fell roughly 28% in five trading sessions before rebounding 9.9% to $289.78 on November 9.

💰 Micron reported an 80.7% gross margin in fiscal 2026 compared to Western Digital's 48.9%, highlighting Micron's current profitability advantage.

📈 WDC normalized earnings per share are projected to rise from $24.72 in fiscal 2027 to $40.40 in fiscal 2028, representing approximately 63% growth.

💾 Micron offers more direct AI memory exposure while Western Digital benefits from improving margins and contracted storage demand.

📊 WDC reported fiscal first-quarter 2027 revenue of $4.38 billion, up 55% year over year, with non-GAAP gross margin expanding to 58.1%.

🔮 Management expects approximately $5.1 billion in fiscal second-quarter revenue with non-GAAP gross margin reaching 60% to 61%.

💹 WDC's average selling price per terabyte increased approximately 28% year over year reflecting stronger pricing and demand for higher-capacity hard drives.

📉 Micron's gross margin fell to just 2.7% in fiscal 2023 illustrating the volatility associated with memory-industry pricing cycles.

⚖️ Western Digital looks potentially attractive at approximately 11.7 times its supplied fiscal 2027 earnings estimate if analysts' growth expectations materialize.

🛡️ Both companies face risks from rising component costs for WDC and potential margin compression for Micron if memory supply catches up with demand.

Bullish Signals
  • Western Digital reported fiscal first-quarter 2027 revenue of $4.38 billion, up 55% year over year, while non-GAAP gross margin expanded to 58.1%, increasing 1,420 basis points.
  • Management expects approximately $5.1 billion in fiscal second-quarter revenue with non-GAAP gross margin reaching 60% to 61%.
  • Western Digital's average selling price per terabyte increased approximately 28% year over year, reflecting stronger pricing and demand for higher-capacity hard drives.
  • Analysts project normalized earnings per share will rise from $24.72 in fiscal 2027 to $40.40 in fiscal 2028, representing approximately 63% growth.
  • Western Digital's gross margin improved from 22.2% in fiscal 2023 to 48.9% in fiscal 2026 according to TIKR historical data.
  • The company benefits from long-term storage agreements with higher-capacity drives and stronger selling prices supporting margin expansion.
Risk Factors
  • Sustained pricing power will be critical to future profitability as the key question is whether WDC can sustain stronger pricing.
  • Western Digital stock declined approximately 28% from October 30 through November 6 before rebounding, indicating recent market volatility.
  • Comparisons across earlier years require caution following its February 2025 Sandisk separation which impacts historical data interpretation.
Full Analysis
Jim Cramer recently compared Western Digital (WDC) and Micron Technology (MU), favoring Micron due to its advanced memory technology and higher current gross margins of 80.7% in fiscal 2026 versus WDC's 48.9%. Despite this preference, the article highlights that WDC presents a compelling alternative with improving profitability and significant projected earnings growth. Western Digital reported strong fiscal first-quarter 2027 results with revenue rising 55% year-over-year to $4.38 billion and non-GAAP gross margin expanding significantly to 58.1%. Management forecasts fiscal second-quarter revenue of approximately $5.1 billion with margins expected to reach 60% to 61%, driven by higher average selling prices per terabyte for high-capacity hard drives. Analysts project WDC's normalized earnings per share will grow from $24.72 in fiscal 2027 to $40.40 in fiscal 2028, representing a 63% increase. At its recent trading price of $289.78, the stock trades at an indicative forward P/E of approximately 11.7 times based on fiscal 2027 estimates, suggesting potential value if growth expectations materialize over the next two years.