SAN JOSE, Calif., April 28, 2026, 14:06 PDT
Western Digital shares picked up roughly 5% in late Tuesday action as Seagate Technology’s earnings and outlook came in ahead of Wall Street’s targets, sharpening the focus on Western Digital’s ability to keep up with AI-driven storage demand. The company is set to report its fiscal third-quarter numbers after Thursday’s closing bell.
This shift carries weight now, with Wall Street casting Western Digital as a go-to play on AI data center growth. According to TipRanks, options traders are bracing for a swing of 11.63% in either direction following the company’s report—well above the 9.3% average move seen after its last four earnings.
It’s a straightforward picture, though the scale is massive. AI systems churn out—and depend on—huge volumes of data, driving demand for high-capacity hard disk drives. Most of that business funnels through Western Digital, Seagate, and Toshiba, so investors are essentially tracking just a handful of key players here.
C.J. Muse at Cantor Fitzgerald bumped his price target for Western Digital to $500 from $420 on Monday, maintaining an Overweight rating. BofA took its target up as well, to $495 from $415, sticking with Buy. Cantor pointed to robust nearline demand—those big drives data centers use for bulk storage that doesn’t need to be accessed right away—as a reason Western Digital might turn in a “beat-and-raise” quarter. Streetinsider
BofA’s Wamsi Mohan says “hard disk drive supply remains tight,” citing a lack of new unit capacity from manufacturers, according to Barron’s. That’s basically the backbone of the bullish argument here: so long as cloud demand holds up and suppliers keep the brakes on production, stronger pricing could stick around longer than in previous storage cycles. Barron’s
Cantor is calling for Western Digital’s gross margin to hit at least 50% starting in the September quarter, maybe even heading toward 60% by late 2028, according to Investing.com. The firm’s 2026 projections now stand at $14.7 billion in revenue and $12.55 per share in earnings—both landing above the consensus numbers mentioned in the report.
Western Digital’s January update handed analysts a few data points to chew on. For its fiscal second quarter, the company posted revenue of $3.02 billion, non-GAAP diluted EPS at $2.13, and a non-GAAP gross margin of 46.1%. (Those non-GAAP numbers are stripped of some costs.) Guidance for the third quarter came in at $3.2 billion in revenue, give or take $100 million, and adjusted EPS forecast at $2.30, up or down 15 cents.
Back in January, Chief Executive Irving Tan pointed to “disciplined execution” during the quarter, with customers looking for high-capacity HDDs in bulk. Chief Financial Officer Kris Sennesael added that the business “continues to strengthen,” highlighting ongoing demand from data centers and the shift toward higher-capacity drives. Western Digital Corporation
Seagate surprised the sector with its latest report, projecting fourth-quarter revenue of $3.45 billion, topping the $3.16 billion analysts had been looking for. Adjusted EPS? $5, well above the $3.97 estimate, according to Reuters. The stock jumped roughly 10% in after-hours trading.
Western Digital shed 2.43% during Tuesday’s session, ending the day at $390.99, per MarketWatch. That marks a second day in the red. Shares are still trading under last week’s 52-week high, so after-hours action looks more like a sentiment check than a clear breakout.
There’s a risk here: the market may be acting as though this cyclical name is suddenly immune to cycles. UBS last week bumped its price target higher—still Neutral overall—emphasizing that near-term fundamentals look solid but HDD shares are, fundamentally, still cyclical. The firm notes any real downcycle hasn’t vanished, only moved further out. A pullback in hyperscaler budgets, the industry leaning into solid-state drives faster than expected for certain workloads, or a surprise surge in capacity—all could undercut the current pricing momentum.
Thursday’s report is shaping up as a higher-stakes event than usual. Investors plan to scrutinize revenue figures, margins, order clarity, and any signals about supply discipline. After analyst upgrades this week and Seagate’s upbeat guidance, Western Digital might find that even a solid beat won’t satisfy if its outlook on pricing wobbles.
