Western Digital (WDC) AI Stock Analysis

• Market Cap: $61.91B
• Dividend Yield: 0.18%
• Average Volume (3M): 7.55M
• Price to Earnings (P/E): 26.4
• Beta (1Y): 2.28
• Revenue Growth: -16.35%
• EPS Growth: 316.56%
• Country: US
• Employees: 51,000
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 1.78
• Shares Outstanding: 341,899,300
• 10 Day Avg. Volume: 6,638,939
• 30 Day Avg. Volume: 7,547,745
• 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: 0.77
• Enterprise Value/Revenue: 3.99
• Enterprise Value/Gross Profit: 10.15
• Enterprise Value/Ebitda: 14.88
• 1Y Price Target: $188.21
• Price Target Upside: 3.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 7.68
• Revenue Forecast (FY): $11.76B

• Rating: 77 Outperform
• Price Target: $193.00 ▲(6.58% Upside)

Western Digital's strong financial recovery, positive technical indicators, and robust earnings call guidance are the primary drivers of its solid stock score. While valuation metrics suggest a moderate outlook, strategic corporate events and AI-driven demand support future growth prospects.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong market demand and effective product positioning, supporting long-term business expansion.

Cash Flow Generation

Robust free cash flow generation enhances financial flexibility, enabling strategic investments and shareholder returns, crucial for sustainable growth.

AI-Driven Demand

AI-driven demand for high-capacity storage solutions positions Western Digital to capitalize on emerging technology trends, ensuring long-term revenue streams.

Negative Factors

Revenue Decline

The recent revenue decline could signal challenges in market competition or product demand, potentially impacting future growth if not addressed.

Moderate Leverage

Moderate leverage may limit financial flexibility and increase vulnerability to economic downturns, affecting long-term stability and investment capacity.

Macroeconomic Uncertainties

Macroeconomic uncertainties can impact demand and operational costs, posing risks to revenue stability and strategic planning over the medium term.

Western Digital Business Overview & Revenue Model

Company Description

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for computing devices, such as desktop and notebook personal computers (PCs), smart video systems, gaming consoles, and set top boxes; flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications; and flash-based memory wafers. The company also provides data center devices and solutions comprising enterprise helium hard drives; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; data center solutions for data storage systems and tiered storage models; and data storage platforms. In addition, it offers client solutions, such as external HDD storage products in mobile and desktop form; client portable SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, and cameras and smart video systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field back up of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the G-Technology, SanDisk, and WD brands to original equipment manufacturers, distributors, dealers, resellers, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.

How the Company Makes Money

Western Digital generates revenue primarily through the sale of its data storage products, which include HDDs, SSDs, and other storage solutions. The company has a diversified revenue model with key streams coming from both Client Solutions and Data Center Solutions. Client Solutions revenue is driven by sales of consumer-oriented storage products, such as external drives and internal SSDs for laptops and desktops. Data Center Solutions revenue is primarily derived from sales of high-capacity storage systems and solutions tailored for enterprise customers and cloud data centers. Additionally, Western Digital benefits from strategic partnerships with major technology firms and cloud service providers, which helps expand its market reach and solidify its presence in emerging markets. The company's ongoing investment in research and development also plays a crucial role in driving innovation, allowing it to maintain competitive pricing and product differentiation, further contributing to its earnings.

Western Digital Financial Statement Overview

Summary

Western Digital demonstrates a solid financial recovery with strong profitability and cash flow metrics. Despite a revenue decline, the company has maintained healthy margins and cash flows. The balance sheet is stable, though moderate leverage could pose risks.

Income Statement

Western Digital's income statement shows a strong recovery with a significant improvement in gross profit margin to 39.34% and net profit margin to 21.30% in the TTM period. Despite a recent revenue decline of 9.62%, the company has managed to maintain healthy EBIT and EBITDA margins. The overall revenue growth trajectory is positive, indicating a rebound from previous periods of negative growth.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.80 in the TTM period. Return on equity has improved significantly to 35.05%, showcasing effective utilization of equity. However, the equity ratio indicates moderate leverage, suggesting potential risks if market conditions worsen.

Cash Flow

Cash flow analysis reveals robust free cash flow growth of 51.68% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, and the free cash flow to net income ratio of 0.83 suggests efficient conversion of earnings into cash. These metrics highlight the company's strong cash flow management.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.52B	6.32B	6.25B	18.79B	16.92B
Gross Profit	3.69B	1.77B	1.39B	5.87B	4.52B
EBITDA	1.94B	243.00M	289.00M	3.40B	2.46B
Net Income	1.86B	-798.00M	-1.68B	1.55B	821.00M
Balance Sheet
Total Assets	14.00B	24.19B	24.55B	26.26B	26.13B
Cash, Cash Equivalents and Short-Term Investments	2.11B	1.55B	2.02B	2.33B	3.37B
Total Debt	5.08B	7.82B	7.07B	7.02B	8.72B
Total Liabilities	8.69B	13.37B	12.71B	14.04B	15.41B
Stockholders Equity	5.31B	10.82B	11.84B	12.22B	10.72B
Cash Flow
Free Cash Flow	1.28B	-781.00M	-1.22B	773.00M	895.00M
Operating Cash Flow	1.69B	-294.00M	-408.00M	1.88B	1.90B
Investing Cash Flow	150.00M	-27.00M	-762.00M	-1.19B	-765.00M
Financing Cash Flow	-1.61B	187.00M	875.00M	-1.72B	-817.00M

Western Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 181.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 181.08 is above the 20-day moving average (MA) of 166.42, above the 50-day MA of 151.53, and above the 200-day MA of 86.73, indicating a bullish trend. The MACD of 7.35 indicates Positive momentum. The RSI at 61.19 is Neutral, neither overbought nor oversold. The STOCH value of 41.29 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	77 Outperform	$61.91B	26.40	31.48%	0.18%	-16.35%	316.56%
NTAP	76 Outperform	$22.16B	19.48	125.35%	1.86%	2.64%	4.12%
STX	68 Neutral	$63.29B	38.04	―	0.97%	31.56%	106.00%
PSTG	64 Neutral	$22.82B	182.50	9.27%	―	13.18%	-0.92%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
HPQ	61 Neutral	$21.35B	8.77	―	5.02%	4.09%	-5.77%
SMCI	58 Neutral	$18.57B	24.93	12.79%	―	12.22%	-48.34%

Western Digital Corporate Events

Western Digital Approves Stock Plan Amendment at Meeting

On November 20, 2025, Western Digital Corporation held its annual stockholders meeting where the amendment and restatement of the 2005 Employee Stock Purchase Plan was approved, increasing the shares available for issuance by 8 million. Additionally, the stockholders elected eight directors, approved executive officer compensation, and ratified KPMG LLP as the independent registered public accounting firm for fiscal 2026, reflecting continued support for the company’s strategic decisions and governance.

Western Digital Appoints New Chief Accounting Officer

On October 31, 2025, Western Digital Corporation announced the appointment of Brad Feller as Senior Vice President and Chief Accounting Officer, effective November 14, 2025. Feller, who has a diverse background in financial leadership roles across various technology companies, will replace Gene M. Zamiska. This strategic appointment is accompanied by a comprehensive compensation package, including a base salary, bonuses, and stock units, reflecting the company’s commitment to strengthening its financial leadership and potentially impacting its market positioning positively.