SAN JOSE, Calif., March 4, 2026, 15:35 PST
- Western Digital says top cloud customers have firm 2026 purchase orders; some extend to 2028
- CFO flags mid- to high-single-digit price-per-terabyte gains in calendar 2026, then a steadier setup
- CEO says AI-generated video can need 100–1,000 times more storage than text or still images
Western Digital’s top cloud customers have placed firm purchase orders for all of calendar 2026, with some commitments stretching into 2027 and 2028, the company’s chief executive told investors this week, pointing to demand tied to artificial intelligence workloads. The company also expects mid- to high-single-digit year-over-year gains in average selling price per terabyte in 2026, its finance chief said. 1
The comments land as investors look for proof that a long-running boom in AI data centers is flowing beyond chips and servers into the less glamorous parts of the stack — storage, where spending can swing sharply when customers overbuy and then pause.
For Western Digital, the immediate question is whether tighter supply and longer-term contracts can keep pricing firm in hard-disk drives used in large data centers, even as rivals chase the same buyers and new technologies raise execution risk.
Chief Executive Irving Tan said the storage outlook is being reshaped by the shift toward multimodal AI, especially video. “Video itself… requires… somewhere between 100 and 1,000 times more” storage than text and still images, he said, adding that industrial uses such as autonomous-vehicle video retention and factory automation also generate “tremendous” storage needs. 2
Western Digital’s pitch to investors rests on selling more capacity without building more factories. Tan said the company is “not adding any drive unit capacity,” and is instead trying to debottleneck existing lines and push customers toward higher-capacity drives, while working through a technology transition that includes heat-assisted magnetic recording, or HAMR, a method that uses heat to write smaller bits and lift capacity. 3
The company’s closest hard-disk rival, Seagate Technology, has also been telling investors that AI workloads — and video in particular — are increasing storage needs, as the industry leans on higher-density designs rather than chasing unit growth. 4
Western Digital shares were up about 4% on Wednesday, according to MarketScreener data. 5
Separately, a regulatory filing showed director Martin I. Cole sold 6,000 Western Digital shares on March 2 under a Rule 10b5-1 trading plan adopted in August 2025. 6
Still, the setup is not risk-free. If AI spending cools or big cloud buyers (hyperscalers, the largest cloud and internet firms) slow their buildouts, storage orders can slip quickly. And the move to newer recording methods like HAMR can run into yield or reliability problems before it pays off in volume shipments.
Western Digital makes hard-disk drives and other storage products used in data centers, PCs and consumer devices. In recent investor updates, it has leaned harder on cloud demand, where buyers often measure pricing as the cost per terabyte — what they pay for each unit of storage capacity.
