Western Digital Beats Q1 Forecasts on AI Storage Demand

Western Digital Corporation reported fiscal first-quarter revenue of $4.38 billion, a 55% increase from $2.82 billion a year earlier. The result beat Wall Street projections of $4.14 billion, while profit rose to $1.78 billion with adjusted earnings of $4.64 per share, surpassing the expected $4.11.

Growth was driven by artificial intelligence infrastructure buildouts and a 28% increase in the blended average selling price per terabyte. Chief Executive Irving Tan stated that the company has demand visibility through 2030 or 2031 across its top seven customers, including neoclouds and frontier AI labs. Tan argued that data storage represents a more lasting AI opportunity than computing power.

Despite the strong results and second-quarter revenue guidance of $5.0 billion to $5.2 billion, shares fell approximately 5% to 6% in after-hours trading. This decline followed a broader market sell-off in AI-linked stocks and profit-taking after the stock more than doubled this year. Prior to the report, analysts from Morgan Stanley, Wells Fargo, and UBS had expressed caution regarding near-term headwinds and potential pricing disruptions from Toshiba's capacity expansion.

The company also announced a 17% increase in its quarterly dividend to 17.5 cents per share.