San Jose, California, Feb 3, 2026, 11:22 (PST)
- The board has approved an extra $4.0 billion for share buybacks
- Approximately $484 million is still available from the previous buyback authorization
- Rising AI server demand is putting pressure on segments of the memory and storage market
Western Digital announced Tuesday that its board has greenlit an extra $4 billion for share buybacks, driven by soaring demand for its memory chips in AI servers. The stock has jumped 57% so far this year, following a more than threefold gain in 2025. With around $484 million left from a previous $2 billion buyback plan, the move comes amid a global chip shortage that’s boosting prices and extending lead times. Just last week, the company projected fiscal third-quarter revenue and profits above analyst forecasts, fueled by strong demand for hard drives and flash storage from AI server customers. (Reuters)
The larger buyback is significant now since it provides the company with a quick tool to respond as AI-driven demand transforms segments of the storage chain. It also reduces the number of outstanding shares, potentially boosting earnings per share even if revenue remains flat.
Investors are hunting for proof that AI spending is solidifying into consistent hardware orders. A board-level cash return counts as one indicator—though it’s adjustable and can be scaled down.
Shares climbed roughly 4% during late morning trading.
Western Digital revealed that its new buyback authorization kicks in immediately, allowing both open-market and private share repurchases. The speed of these purchases will vary based on market conditions. “The expanded $4.0 billion buyback authorization demonstrates our confidence in WD’s future and commitment to shareholder value,” said Irving Tan. The company also noted it might execute repurchases through a Rule 10b5-1 plan—a predetermined trading strategy under U.S. securities regulations—and retains the option to pause or end the program. (Business Wire)
Western Digital offers both hard disk drives and flash storage, the latter relying on NAND—a type of semiconductor memory. These components are snapped up by data-center operators and device manufacturers to handle data storage and transfer.
AI servers—the powerful rigs behind training and running AI models—pump out massive data sets that require storage, transfer, and backup. This surge is driving up demand for bigger drives and speedier flash storage.
In the hard drive market, it goes head-to-head with Seagate Technology. When it comes to memory and enterprise storage, its rivals include Micron Technology and Samsung Electronics.
AI developers and consumer electronics companies are clashing fiercely over limited memory supplies. Although chipmakers are pouring in more investment, expanding capacity isn’t something that happens overnight.
But buybacks can halt just as quickly as they begin. If memory prices fall or AI demand eases, Western Digital might hold onto cash for investments or debt repayment, potentially leaving part of the authorization untouched.
With $484 million left from the previous plan, the new approval brings buyback capacity to roughly $4.5 billion. Actual purchases, however, will only become clear in upcoming quarterly reports.
