Western Digital (WDC) AI Stock Analysis

• Market Cap: $51.49B
• Dividend Yield: 0.13%
• Average Volume (3M): 9.84M
• Price to Earnings (P/E): 31.1
• Beta (1Y): 2.19
• Revenue Growth: 2.12%
• EPS Growth: N/A
• Country: US
• Employees: 51,000
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 1.78
• Shares Outstanding: 342,795,530
• 10 Day Avg. Volume: 9,078,214
• 30 Day Avg. Volume: 9,842,566
• PEG Ratio: -0.04
• Price to Book (P/B): 3.96
• Price to Sales (P/S): 2.31
• P/FCF Ratio: 17.10
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $163.89
• Price Target Upside: 9.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 78 Outperform
• Price Target: $157.00 ▲(4.52% Upside)

Western Digital's strong earnings call performance and positive technical indicators are the most significant factors driving the stock's score. The company's financial recovery and strategic focus on AI and data center solutions further support its potential. However, the relatively high valuation and past financial volatility are risks to consider.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong demand for Western Digital's products, particularly driven by AI-related needs, which suggests a durable expansion in market reach and product adoption.

Cash Generation

Strong free cash flow generation indicates efficient operations and the ability to reinvest in growth opportunities or return capital to shareholders, enhancing long-term financial health.

AI-Driven Demand

AI-driven demand for high-capacity storage solutions positions Western Digital to capitalize on a structural industry trend, supporting sustained growth and innovation in product offerings.

Negative Factors

Debt Levels

While leverage is currently manageable, reliance on debt financing could pose risks if market conditions change, potentially impacting financial flexibility and stability.

Operating Expenses

Higher-than-expected operating expenses could pressure margins and profitability if not controlled, affecting long-term operational efficiency and cost management.

Macroeconomic Uncertainties

Macroeconomic uncertainties can impact demand and supply chain stability, posing risks to revenue consistency and strategic planning, affecting long-term business resilience.

Western Digital Business Overview & Revenue Model

Company Description

Western Digital Corporation (WDC) is a leading global provider of data storage solutions, specializing in hard disk drives (HDDs), solid-state drives (SSDs), and other data storage technologies. The company operates in two primary segments: Client Solutions and Data Center Solutions. Its core products include internal and external drives for personal computers, enterprise storage systems for data centers, and flash storage solutions for various applications, serving a diverse range of markets from consumer electronics to enterprise IT infrastructure.

How the Company Makes Money

Western Digital generates revenue primarily through the sale of its storage devices and solutions. Key revenue streams include the sale of HDDs and SSDs to original equipment manufacturers (OEMs), retailers, and directly to consumers. The company also earns revenue from data center solutions, which include enterprise-grade storage systems and cloud storage products. Significant partnerships with major technology companies and cloud service providers contribute to its earnings by ensuring a steady demand for its storage solutions. Additionally, Western Digital invests in research and development to innovate and enhance its product offerings, which helps maintain its competitive edge and drive sales growth.

Western Digital Financial Statement Overview

Summary

Western Digital demonstrates a significant turnaround in its financial performance in TTM, with improved revenue growth, profitability, and cash flow. The company has managed to stabilize its balance sheet, although past volatility and leverage levels are considerations. Overall, Western Digital's financial statements reflect a strong recovery trajectory, yet caution is warranted given historical fluctuations.

Income Statement

Western Digital's income statement shows a strong recovery in TTM with a revenue growth rate of 2.12% from the previous year and a significant improvement in profitability, evidenced by a gross profit margin of 38.0% and a net profit margin of 14.16%, compared to negative figures in prior periods. The EBIT margin of 22.85% and EBITDA margin of 24.53% in TTM further highlight the company's return to operational efficiency and profitability. However, past volatility and negative margins remain a concern.

Balance Sheet

The balance sheet indicates a moderate risk with a debt-to-equity ratio of 0.89 in TTM, showing a manageable level of leverage. The return on equity has improved to 35.40% in TTM, reflecting better profitability. However, the equity ratio is 37.92%, suggesting a dependency on liabilities to finance assets. Historical fluctuations in equity and liabilities raise concerns about financial stability.

Cash Flow

Western Digital's cash flow statement shows a strong recovery in TTM with positive free cash flow growth and an operating cash flow to net income ratio of 0.90, indicating strong cash generation relative to earnings. The free cash flow to net income ratio of 0.68 also supports healthy cash conversion. Prior negative cash flows underscore past operational challenges.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2019	Dec 2018
Income Statement
Total Revenue	9.52B	6.32B	6.25B	16.57B	20.65B
Gross Profit	3.69B	1.77B	1.39B	3.75B	7.71B
EBITDA	1.94B	243.00M	289.00M	1.99B	5.89B
Net Income	1.86B	-798.00M	-1.68B	-754.00M	675.00M
Balance Sheet
Total Assets	14.00B	24.19B	24.55B	26.37B	29.23B
Cash, Cash Equivalents and Short-Term Investments	2.47B	1.55B	2.02B	3.46B	5.00B
Total Debt	4.71B	7.43B	7.07B	10.52B	11.17B
Total Liabilities	8.46B	13.14B	12.71B	16.40B	17.70B
Stockholders Equity	5.54B	11.05B	11.84B	9.97B	11.53B
Cash Flow
Free Cash Flow	1.28B	-781.00M	-1.22B	790.00M	3.40B
Operating Cash Flow	1.69B	-294.00M	-408.00M	1.55B	4.21B
Investing Cash Flow	150.00M	-27.00M	-762.00M	-1.27B	-1.66B
Financing Cash Flow	-1.61B	187.00M	875.00M	-1.83B	-3.90B

Western Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.21
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDC, the sentiment is Positive. The current price of 150.21 is above the 20-day moving average (MA) of 125.30, above the 50-day MA of 110.12, and above the 200-day MA of 67.38, indicating a bullish trend. The MACD of 7.95 indicates Negative momentum. The RSI at 72.70 is Negative, neither overbought nor oversold. The STOCH value of 79.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WDC.

Western Digital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDC	―	$51.49B	31.13	25.98%	0.13%	2.12%	―
PSTG	―	$31.88B	238.24	10.04%	―	11.31%	-1.30%
NTAP	―	$23.51B	20.81	123.00%	1.77%	3.45%	9.69%
SMCI	―	$29.93B	30.35	17.90%	―	47.04%	-17.89%
STX	―	$56.57B	28.62	―	1.08%	31.56%	106.00%
HPQ	―	$25.86B	10.07	―	4.21%	3.11%	-3.54%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Western Digital Corporate Events

Western Digital Reports Strong Q1 2026 Results

Western Digital Corp. is a leading data storage company that provides innovative solutions for cloud, enterprise, and AI-driven data workloads. The company is known for its cutting-edge technology and commitment to scalable and sustainable storage solutions.

Western Digital’s Q4 2025 Earnings Call Highlights

Western Digital Corp. recently held its earnings call for the fiscal fourth quarter of 2025, revealing a generally positive sentiment. The company reported strong financial performance, primarily driven by robust demand in the data center segment and significant debt reduction. The introduction of dividends and share repurchase programs further underscores Western Digital’s commitment to returning value to shareholders, despite a decline in consumer revenue and uncertainties related to tariffs. Overall, the positive aspects of the earnings call significantly overshadowed the negatives.

Western Digital Reports Strong Fiscal 2025 Results

Western Digital Corp., a leader in data storage solutions, operates in the technology sector, providing scalable and sustainable technology for hyperscalers, enterprises, and cloud providers. In its fiscal fourth quarter and fiscal year 2025, Western Digital reported significant financial growth, with a 30% year-over-year increase in quarterly revenue to $2.61 billion and a 51% increase in annual revenue to $9.52 billion. The company also achieved a GAAP diluted EPS of $0.67 and a non-GAAP diluted EPS of $1.66, alongside a robust free cash flow of $675 million. Key financial metrics highlighted include a 620 basis point increase in gross margin year-over-year and a substantial reduction in operating expenses by 51% for the quarter. Western Digital also announced strategic financial moves, including reducing debt by $2.6 billion, initiating a cash dividend, and authorizing a $2.0 billion share repurchase program. Looking ahead, the company expects continued growth, driven by strong demand in the cloud market, with projected revenue growth of 22% year-over-year for the first quarter of fiscal 2026. Management remains optimistic about the future, emphasizing the foundational role of HDDs in the data infrastructure landscape and the company’s position in an AI-driven future.