Western Digital (WDC) AI Stock Analysis

• Market Cap: $55.84B
• Dividend Yield: 0.13%
• Average Volume (3M): 9.77M
• Price to Earnings (P/E): 23.8
• Beta (1Y): 2.29
• 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: 8,821,564
• 30 Day Avg. Volume: 9,769,773
• 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: 0.92
• Enterprise Value/Revenue: 4.28
• Enterprise Value/Gross Profit: 10.89
• Enterprise Value/Ebitda: 15.95
• 1Y Price Target: $181.63
• Price Target Upside: 11.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 7.59
• Revenue Forecast (FY): $11.73B

• Rating: 79 Outperform
• Price Target: $175.00 ▲(7.15% Upside)

Western Digital's strong financial recovery and positive earnings call sentiment are the most significant factors driving the stock score. The technical analysis supports a bullish outlook, while the valuation suggests some caution due to a high P/E ratio. Overall, the company's strategic positioning in AI-driven markets and robust cash flow management contribute to a favorable stock assessment.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong market demand and effective sales strategies, positioning the company for sustained expansion.

Cash Flow Generation

Robust free cash flow generation enhances financial flexibility, allowing for reinvestment in growth initiatives and shareholder returns.

AI-Driven Demand

AI adoption is a structural trend boosting demand for storage solutions, ensuring long-term revenue streams and market relevance.

Negative Factors

Revenue Decline

Recent revenue decline poses a challenge to growth momentum, potentially impacting future profitability if not reversed.

Operating Expenses

Higher-than-expected operating expenses could pressure margins, necessitating tighter cost controls to sustain profitability.

Macroeconomic Uncertainties

Macroeconomic uncertainties can affect demand and supply chain stability, posing risks to consistent operational performance.

Western Digital Business Overview & Revenue Model

Company Description

Western Digital Corporation (WDC) is a leading global data storage technology and solutions company headquartered in San Jose, California. The company specializes in designing, manufacturing, and selling a wide range of hard disk drives (HDDs), solid-state drives (SSDs), and data center systems. WDC operates primarily in two segments: Client Solutions, which includes storage devices for personal computers and consumer electronics, and Data Center Solutions, focusing on storage solutions for enterprise and cloud applications. Its core products cater to various sectors including consumer electronics, enterprise storage, and mobile devices, contributing to its position as a key player in the data storage industry.

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. While revenue growth has faced challenges, the company has effectively managed its margins and cash flows. The balance sheet remains stable, though moderate leverage could pose risks in adverse conditions. Overall, the financial health of Western Digital is improving, positioning it well for future growth.

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	2.47B	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: 163.33
• 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 163.33 is above the 20-day moving average (MA) of 157.42, above the 50-day MA of 135.74, and above the 200-day MA of 77.66, indicating a bullish trend. The MACD of 5.72 indicates Positive momentum. The RSI at 60.63 is Neutral, neither overbought nor oversold. The STOCH value of 75.29 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	79 Outperform	$55.84B	23.81	31.48%	0.13%	-16.35%	316.56%
NTAP	77 Outperform	$21.64B	19.01	125.35%	1.90%	2.64%	4.12%
PSTG	72 Outperform	$29.24B	218.47	10.04%	―	11.31%	-1.30%
STX	66 Neutral	$59.09B	35.52	―	1.08%	31.56%	106.00%
HPQ	63 Neutral	$22.83B	9.22	―	4.75%	3.94%	-5.77%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SMCI	58 Neutral	$20.21B	27.13	12.79%	―	12.22%	-48.34%

Western Digital Corporate Events

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.

The most recent analyst rating on (WDC) stock is a Buy with a $171.00 price target. To see the full list of analyst forecasts on Western Digital stock, see the WDC Stock Forecast page.

Western Digital’s Earnings Call Highlights Robust Growth

Western Digital’s recent earnings call painted a picture of robust financial health and strategic foresight, underscored by strong revenue and earnings growth. The sentiment throughout the call was overwhelmingly positive, driven by the company’s ability to capitalize on AI-related demand and enhance shareholder value while maintaining operational efficiency despite slightly elevated operating expenses. The outlook remains optimistic, with continued demand growth and strategic investments paving the way for future success.

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.