Shares of Western Digital Corp. (WDC) jumped 9.3% to $427.45 on Wednesday, riding a wave of optimism following Seagate Technology's (STX) better-than-expected quarterly forecast. The rally lifted the entire storage sector, with Seagate itself soaring 16.6% after projecting fiscal fourth-quarter revenue of $3.45 billion and non-GAAP earnings of $5.00 per share.
The upbeat guidance from Seagate refocused investor attention on hard-disk drives (HDDs)—the high-capacity storage workhorses powering cloud and AI data centers. The market had been jittery about the pace of AI infrastructure spending, but Seagate's results offered a rare, unambiguous signal: larger data volumes are translating into higher drive sales and stable pricing.
Western Digital's Turn in the Spotlight
Western Digital is set to report its fiscal third-quarter results after Thursday's closing bell on April 30, with an investor call scheduled for 1:30 p.m. Pacific time. The company's own guidance already set expectations: revenue around $3.2 billion at the midpoint, non-GAAP gross margin of 47.5%, and non-GAAP EPS of $2.30. Chief Financial Officer Kris Sennesael previously tied those targets to robust demand from data centers and increased adoption of high-capacity drives.
In its fiscal second quarter, Western Digital posted revenue of $3.02 billion, a 25% year-over-year increase, with non-GAAP gross margin of 46.1% and EPS of $2.13. CEO Irving Tan attributed the performance to the "AI-driven data economy."
Sector-Wide Rally
The storage rally extended beyond Western Digital and Seagate. Micron Technology (MU) and SanDisk also gained as traders grouped memory and storage stocks into the broader AI-infrastructure theme. The sector's momentum underscores the growing conviction that AI capital expenditure is translating into tangible demand for physical storage.
Seagate's fiscal third-quarter results showed revenue of $3.11 billion and non-GAAP earnings of $4.10 per share, beating analyst estimates. CEO Dave Mosley described the environment as a "new era of structural growth," pointing to AI applications that "amplify data creation."
Analyst Upgrades Ahead of Earnings
Analysts have been raising their price targets for Western Digital ahead of the print. Wedbush's Matt Bryson increased his target to $530 from $320, maintaining a Buy rating. BofA Securities' Wamsi Mohan lifted his target to $495 from $415, according to TipRanks and Investing.com.
However, Bryson also flagged potential headwinds, including production limits, locked-in supply deals, and memory-sector challenges that could cap further gains. Western Digital itself has pointed to demand fluctuations, tariffs, trade regulations, and supply-chain disruptions as risks in its regulatory filings.
What to Watch
Investors will be closely scrutinizing Western Digital's earnings call for confirmation that the optimism is sector-wide, not just a Seagate-specific phenomenon. The company's performance could provide critical insights into the health of the AI-driven storage cycle and whether the current rally is justified by near-term fundamentals.
