Western Digital Beat on Every Line. The Stock Replied With a 1.8% Bounce
A clean beat on revenue, EPS, margins and guidance recovered less than a third of the day's 6.4% selloff. The numbers were never the argument.
Western Digital gave the market the quarter it asked for. Adjusted earnings hit $4.64 a share on $4.38 billion in revenue, both ahead of Wall Street’s numbers, and the company guided the December quarter to $5.1 billion — nearly 12% above what analysts had forecast. The stock’s answer came in two sessions: down 6.4% before the print, up 1.8% after it.
$4.38 billion in revenue beats the $4.14 billion FactSet consensus by 5.8%, landing above the top of the company’s own $4.0–$4.2 billion range. Earnings of $4.64 a share beat the $4.11 consensus by 12.9% and the company’s $4.00 midpoint by 16%. Gross margin reached 57.8%, almost two points above the top of the 55–56% range management had set, up 370 basis points in a quarter and 1,430 from a year ago.
Then the guide. December-quarter revenue of $5.1 billion implies 16.4% sequential growth off the $4.38 billion just reported. The quarter just finished grew 16.9% sequentially off the June quarter’s $3.75 billion. Two straight quarters of mid-teens sequential growth is acceleration, the opposite of the deceleration the stock’s August selloff was priced around.
It didn’t buy back the day. The 1.8% after-hours bounce to $360.64 recovered less than a third of the 6.4% the stock shed in regular trading, a session when most AI-boosted names slumped on renewed spending fears. Western Digital closed 53% below its all-time closing high from June 18, a drawdown built on one worry: that the AI storage cycle is peaking and pricing power goes with it.
Wall Street argued both sides of that worry within hours. Bank of America raised its price target to $800 from $720 the day before the print, modeling a 24% jump in price per terabyte. The stock fell 6.4% anyway — $800 is more than double where it closed Thursday.
Nikkei put a number on the supply fear earlier this month: roughly ¥60 billion. Toshiba plans to spend that much to nearly double its data-center hard-drive capacity by fiscal 2027, aiming to lift its share from just over 10% toward 30%. Tight industry supply is the engine behind Western Digital’s margin run. The company has been a pure-play hard-drive maker since last year’s Sandisk spin-off, and cloud customers were 89% of last quarter’s revenue, so any new supply reads as a direct threat to the price gains carrying the numbers.
Sandisk, the flash business Western Digital spun out last year, reports its own fiscal first quarter on Oct. 29.
