Western Digital Surges on AI-Driven Storage Demand

Western Digital’s stock climbed roughly 200% in 2026 after the company reported fiscal third-quarter revenue of $3.3 billion, a 45% increase from a year earlier. The stock traded near record highs after the results.

The company reported a non-GAAP gross margin of 50.5%, more than 10 percentage points higher than a year earlier. Adjusted earnings per share were $2.72, nearly double the prior-year level.

The company reported exabytes sold rose 34% year over year and average selling price per exabyte increased about 9%, indicating it sold more capacity and earned more per unit of storage.

Western Digital attributed the quarter’s performance to demand from cloud and artificial intelligence customers that require large-scale data storage. High-capacity hard disk drives remain a lower-cost option for storing the volumes of data used in AI workloads.

Cloud customers account for almost 90% of Western Digital’s revenue, the company reported, a shift from the consumer PC cycle that previously contributed a larger share of sales.

Analysts adjusted forecasts after the results. Evercore ISI raised its price target to $575 from $410 and maintained an Outperform rating. Barclays increased its target to $620 from $450 with an Overweight rating. Mizuho raised its target to $550 from $470 and kept an Outperform rating. A total of 23 analysts cover the stock with a consensus Buy rating and an average 12-month target near $518.

Analysts cited constrained industry supply and continued pricing strength in memory and storage as reasons for the higher targets.