Western Digital gains from AI storage demand as supply worries linger
Western Digital reported fiscal first-quarter revenue of $4.38 billion, up about 55%, and adjusted earnings of $4.64 per share, both above expectations. Strong hard-drive demand from cloud and AI customers lifted margins, but investors worried about future supply and capital spending. The stock fell in extended trading before recovering part of the loss.
Western Digital’s fiscal first-quarter sales reached $4.38 billion, roughly 55% higher year over year, while adjusted earnings per share were $4.64 versus about $4.11 expected. Shipments rose 22%, and pricing per terabyte climbed 28%, helping adjusted gross margin reach 58.1% from 43.9% a year earlier.
The company also reported adjusted operating margin of 49.1% and about $1.38 billion in free cash flow. It raised its quarterly dividend 17% to $0.175 per share and guided fiscal second-quarter revenue to about $5.1 billion, implying 66% to 72% growth.
Western Digital’s results suggest AI and cloud expansion may keep pressure on storage supply and pricing. Businesses relying on large data archives could face higher costs or tighter availability, while consumers may see indirect effects through cloud-service pricing and device costs. The company’s rising investment could support jobs and infrastructure, though it remains uncertain whether current demand and margins are durable.