The stock of Western Digital Corp. (WDC) was trading 10% higher after the data storage company reported quarterly financial results that showed accelerating growth in its cloud computing segment.
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The company announced earnings per share of $1.78, which topped the $1.71 that was forecast on Wall Street. Revenue in the quarter totaled $4.10 billion, which narrowly missed estimates of $4.12 billion.
Despite the mixed performance, WDC stock is climbing higher on news that the company’s revenue from its cloud computing division increased 17% to $2.21 billion. Management said that the artificial intelligence (AI) boom has led to a recovery in its memory chips.
Western Digital Raises Guidance
Executives with Western Digital added that they are seeing growing demand for their products as cloud service providers build infrastructure to support new AI applications and models. The company recently announced that its enterprise SSD memory storage device can support Nvidia’s (NVDA) AI server system.
The strong results and growing demand led Western Digital to raise its forward guidance. The company said it now expects revenue in the current quarter of $4.20 billion to $4.40 billion. Analysts had forecast fourth quarter revenue of $4.34 billion. Western Digital also forecast earnings of $1.75 to $2.05. Wall Street consensus called for EPS of $1.91.
WDC stock has now risen 37% this year.
Is Western Digital Stock a Buy?
Western Digital stock has a consensus Strong Buy rating among 16 Wall Street analysts. That rating is based on 13 Buy and three Hold recommendations made in the last three months. There are no Sell ratings on the stock. The average WDC price target of $91.40 implies 27.48% upside potential from current levels.
