Western Digital Beats Earnings Forecasts Amid AI Storage Demand

Western Digital Inc. reported fiscal fourth-quarter 2026 results that surpassed Wall Street estimates for both revenue and earnings. The company posted revenue of $3.75 billion, a 44% year-over-year increase, and GAAP earnings of $3.195 billion, representing a 1,125% increase over the previous year. Adjusted earnings per share reached $3.56. For the full fiscal year 2026, revenue totaled $12.92 billion, with non-GAAP diluted earnings per share more than doubling to $10.22.

Despite the financial beat and the announcement of a $0.15 per share quarterly cash dividend, the company's stock declined 5.36% during the initial trading session and fell as much as 11.7% on Thursday morning.

CEO David Weigand attributed the growth to robust demand for AI storage from hyperscalers and new clouds. To meet this demand, the company is increasing drive capacity, transitioning from 32-terabyte to 40-terabyte models this quarter. Weigand confirmed that long-term agreements are locked in through 2029, with negotiations underway for contracts extending to 2031.

Looking ahead to the first quarter of fiscal 2027, Western Digital provided optimistic guidance, projecting revenue between $4.0 billion and $4.2 billion and earnings per share between $3.85 and $4.15. This represents a projected sales growth of 42% to 49%, which also exceeded analyst forecasts.