Western Digital (NASDAQ:WDC) Announces Quarterly Earnings Results

Western Digital (NASDAQ:WDC) released its quarterly earnings data on Thursday. The data storage provider reported $2.13 EPS for the quarter, topping analysts’ consensus estimates of $1.93 by $0.20, FiscalAI reports. The company had revenue of $3.02 billion during the quarter, compared to the consensus estimate of $2.93 billion. Western Digital had a net margin of 21.37% and a return on equity of 30.89%. The firm’s revenue for the quarter was up 25.2% compared to the same quarter last year. During the same period last year, the firm earned $1.77 EPS.

Here are the key takeaways from Western Digital’s conference call:

• Western Digital beat expectations in Q2, reporting $3.0B revenue (up 25% YoY), $2.13 EPS (up 78% YoY) and a 46.1% gross margin, and guiding Q3 revenue of ~$3.2B with 47%–48% gross margin.
• Demand remained strong and visible—215 EB shipped (up 22% YoY), cloud was 89% of revenue, >3.5M latest-generation ePMR drives shipped (up to 32TB), UltraSMR mix crossed 50% and major customers have firm POs and multi-year LTAs through 2026–2028.
• HAMR and next?gen ePMR momentum accelerated: company began HAMR and next?gen ePMR qualifications with hyperscalers, acquired laser/IP assets to support HAMR, and expects HAMR ramp (targeted start CY2027) to be neutral-to-accretive to gross margins.
• Strong cash generation and shareholder returns: Q2 free cash flow was $653M, net liquidity $3.2B, $615M of buybacks this quarter (part of a $2B program), $1.4B returned since Q4 FY25, and a new quarterly dividend of $12.50 per share; remaining SanDisk shares are planned to be monetized to reduce debt.

Western Digital Stock Performance

Shares of WDC traded down $25.33 during midday trading on Friday, reaching $253.08. 10,511,357 shares of the stock were exchanged, compared to its average volume of 9,701,034. The stock’s 50 day simple moving average is $191.38 and its 200 day simple moving average is $135.34. The company has a market cap of $86.53 billion, a P/E ratio of 37.04, a PEG ratio of 1.33 and a beta of 1.78. Western Digital has a twelve month low of $28.83 and a twelve month high of $285.42. The company has a quick ratio of 0.94, a current ratio of 1.21 and a debt-to-equity ratio of 0.42.

Western Digital Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, March 18th. Shareholders of record on Thursday, March 5th will be issued a $0.125 dividend. This represents a $0.50 dividend on an annualized basis and a yield of 0.2%. The ex-dividend date of this dividend is Thursday, March 5th. Western Digital’s dividend payout ratio is currently 7.28%.

Analyst Upgrades and Downgrades

A number of analysts have recently weighed in on WDC shares. Citigroup raised their target price on Western Digital from $200.00 to $280.00 and gave the company a “buy” rating in a research note on Tuesday, January 20th. Wedbush boosted their target price on shares of Western Digital to $325.00 and gave the stock an “outperform” rating in a research note on Friday. Bank of America increased their price target on shares of Western Digital from $197.00 to $257.00 and gave the company a “buy” rating in a research note on Tuesday, January 20th. Wells Fargo & Company raised their price target on shares of Western Digital to $335.00 and gave the company an “overweight” rating in a report on Friday. Finally, Susquehanna upped their price objective on Western Digital from $135.00 to $205.00 and gave the stock a “neutral” rating in a report on Friday, January 16th. One analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating and four have issued a Hold rating to the company’s stock. According to MarketBeat.com, Western Digital has an average rating of “Moderate Buy” and an average price target of $244.95.

Key Stories Impacting Western Digital

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: WDC beat Q2 EPS and revenue, reported expanding margins and cited robust AI/data?center demand — management also guided Q3 revenue and EPS above consensus, giving the market forward visibility. Western Digital Reports Fiscal Second Quarter 2026 Financial Results
• Positive Sentiment: Analysts sharply increased targets and maintained buy/outperform calls — TD Cowen and Citi lifted targets to $325, Morgan Stanley kept a Buy with a ~$306 target, and Wedbush raised to $325 — these raises underpin bullish expectations for continued AI-driven HDD demand and margin expansion. TD Cowen price target raise
• Positive Sentiment: Market writeups and newsflow highlight accelerating data?center/HDD adoption for AI, which is driving the sector rotation into storage names and supporting higher revenue cadence. Reuters: Western Digital expects quarterly revenue above estimates
• Neutral Sentiment: Multiple outlets posted full earnings and call transcripts / slide deck for investor review — useful for digging into capacity, HAMR progress and customer contract details. WDC Q2 2026 Earnings Transcript
• Neutral Sentiment: Western Digital declared a small quarterly dividend (annualized yield ~0.2%); not material to valuation but noted by income?focused holders.
• Negative Sentiment: After a run to all?time highs and significant bullish analyst coverage, intraday profit?taking and rotation out of momentum names pushed the share price lower despite the positive beats — some commentators cautioned against chasing the stock at stretched levels. Why WDC stock soared / cautionary pieces

Insider Buying and Selling at Western Digital

In related news, insider Cynthia L. Tregillis sold 447 shares of the firm’s stock in a transaction on Wednesday, January 21st. The stock was sold at an average price of $229.00, for a total value of $102,363.00. Following the transaction, the insider owned 143,318 shares in the company, valued at approximately $32,819,822. This trade represents a 0.31% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CEO Irving Tan sold 20,000 shares of the business’s stock in a transaction dated Monday, November 3rd. The shares were sold at an average price of $150.69, for a total value of $3,013,800.00. Following the completion of the transaction, the chief executive officer directly owned 645,467 shares of the company’s stock, valued at approximately $97,265,422.23. This trade represents a 3.01% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 26,816 shares of company stock worth $4,116,148 over the last quarter. Company insiders own 0.18% of the company’s stock.

Institutional Investors Weigh In On Western Digital

A number of institutional investors have recently modified their holdings of WDC. Rakuten Securities Inc. lifted its holdings in Western Digital by 4,070.0% in the second quarter. Rakuten Securities Inc. now owns 417 shares of the data storage provider’s stock valued at $27,000 after buying an additional 407 shares during the period. JPL Wealth Management LLC acquired a new stake in Western Digital during the third quarter worth approximately $33,000. BOKF NA increased its holdings in Western Digital by 6,700.0% in the third quarter. BOKF NA now owns 272 shares of the data storage provider’s stock worth $33,000 after purchasing an additional 268 shares in the last quarter. Geneos Wealth Management Inc. lifted its stake in Western Digital by 229.7% in the first quarter. Geneos Wealth Management Inc. now owns 1,388 shares of the data storage provider’s stock valued at $56,000 after buying an additional 967 shares during the period. Finally, MUFG Securities EMEA plc bought a new position in shares of Western Digital during the 2nd quarter worth approximately $66,000. 92.51% of the stock is owned by institutional investors.

About Western Digital

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.