SAN JOSE, Calif., March 4, 2026, 15:35 PST
- Western Digital reports that its major cloud buyers have locked in purchase orders through 2026, with a few deals now stretching as far as 2028.
- The CFO is pointing to mid- to high-single-digit increases in price per terabyte coming in calendar 2026, with things expected to level out after that.
- The CEO says that AI video can eat up anywhere from 100 to 1,000 times the storage required for text or images.
Western Digital has already locked in firm purchase orders from its biggest cloud clients for all of calendar 2026—and some of those deals actually extend out to 2027 and even 2028, according to the company’s chief executive, who cited demand driven by artificial intelligence workloads during an investor update this week. Looking ahead to 2026, finance chief projections call for average selling price per terabyte to rise by a mid- to high-single-digit percentage year over year.
The remarks come as investors hunt for evidence that the AI data center surge is reaching further than just chips and servers. The focus now? Storage — a corner of the market known for volatile spending patterns, where customer demand can whipsaw after periods of aggressive purchasing.
Western Digital faces an immediate test: Can stricter supply controls and extended contracts actually hold up prices on hard-disk drives for big data center clients? Rivals are closing in on those same customers, and fresh technologies are adding another layer of execution risk.
Chief Executive Irving Tan pointed to a major shift in the storage landscape as AI moves into multimodal territory, with video at the center. “Video itself… requires… somewhere between 100 and 1,000 times more” storage compared to text or still images, he said. Tan also noted industrial applications—think video archives from autonomous vehicles and data from factory automation—are piling up “tremendous” storage demand. Investing.com UK
Western Digital’s investor message: boost capacity, skip the new factories. Tan said, “not adding any drive unit capacity.” Instead, the company is looking to clear bottlenecks in current manufacturing and nudge customers to buy higher-capacity drives. There’s also a technology shift underway—including heat-assisted magnetic recording, or HAMR, a process that uses heat to write smaller bits and increase how much data a drive can store. Investing
Seagate Technology, Western Digital’s main competitor in hard drives, has been signaling to investors that storage demand is getting a lift from AI workloads, especially video. The company says the sector is shifting toward higher-density drives instead of focusing on selling more units.
Western Digital stock picked up roughly 4% Wednesday, MarketScreener data showed.
In a separate disclosure, director Martin I. Cole unloaded 6,000 shares of Western Digital on March 2, according to a regulatory filing. The sale was carried out under a Rule 10b5-1 trading plan put in place in August 2025.
Still, there are clear risks. Should AI investment lose steam or hyperscalers—those massive cloud and internet outfits—pull back on expansion, storage orders could drop in a hurry. The shift to advanced recording tech such as HAMR also isn’t guaranteed smooth sailing; yield or reliability hiccups could show up before the technology really scales.
Western Digital builds hard-disk drives and other storage gear for everything from data centers to PCs and consumer gadgets. Lately, investor updates have put more emphasis on cloud business, a segment where customers typically focus on the price per terabyte—their cost for each unit of storage capacity.
