Is Western Digital Stock a Buy After Q4 Earnings? Here’s What You Need to Know.

Key Takeaways for Western Digital Stock as of August 2026

• Blowout Beat: Q4 revenue hit $3.75B, up 44% YoY, beating the high end of guidance.
• Q1 Guide Lifted: Management guided Q1 FY27 revenue to $4.1B, implying ~45% YoY growth, and EPS to $4.00, with gross margin targeted at 55%-56%.
• Margin Leap: Gross margin jumped 1,310bps YoY to 54.4% as blended price per terabyte rose in the high teens, and operating margin followed to 44.2%, the quarter’s sharpest swing.
• CEO’s Agentic AI Call: Irving Tan told investors agentic AI systems “generate data at every step of the workflow,” with cloud already 89% of revenue at $3.3B.

Western Digital stock just posted the kind of quarter that forces a rethink of what a hard drive maker is worth. TIKR gives you the same financial data professionals use to test that call yourself, free →

Western Digital’s Q4 Earnings Show Pricing Power Outrunning Exabyte Growth

Western Digital (WDC) closed fiscal 2026 with a fourth quarter that beat its own guidance on every line: revenue of $3.75 billion, up 44% year over year, and earnings per share of $3.56, up 109%. Both figures landed at or above the high end of management’s range, capping a year in which WD stock’s underlying business finished its transition from a diversified storage vendor into a pure-play hard disk drive maker riding the AI data buildout. Full-year revenue reached $12.9 billion, up 36%, while full-year EPS more than doubled to $10.22.

Cloud customers drove nearly all of it. The segment made up 89% of revenue at $3.3 billion, up 43% year over year, as hyperscalers kept buying high-capacity nearline drives at improving prices. Client revenue rose 61% to $225 million and consumer revenue climbed 38% to $187 million, both lifted by the same pricing environment. Western Digital shipped 231 exabytes in the quarter, up 22% year over year, a deceleration from the 30%-plus growth rates of recent quarters that CFO Kris Sennesael attributed to customer mix rather than weaker demand.

Pricing did the heavier lifting. The blended price per terabyte rose in the high teens year over year in the fourth quarter, up from high single digits the prior quarter, pushing gross margin up 1,310 basis points to 54.4% and operating margin up 1,610 basis points to 44.2%. Operating expenses fell to 10% of revenue, a 170 basis point sequential improvement. That combination pushed operating income to $1.66 billion, up 126% year over year, and generated $1.3 billion of free cash flow at a 34% margin.

CEO Irving Tan framed the demand shift on the Q4 earnings call: “As AI usage scales, this creates a growing need for storage infrastructure capable of economically storing and managing these massive data sets.” Training built the initial data pile, he said, but inference and now agentic AI keep generating and retaining data continuously, and roughly 80% of hyperscale data still sits on hard drives rather than flash.

That framing underpins the guide. Western Digital expects first-quarter fiscal 2027 revenue of $4.1 billion, plus or minus $100 million, implying 45% year-over-year growth, alongside gross margin of 55% to 56% and EPS of $4.00, plus or minus $0.15. The company is ramping 40-terabyte ePMR drives toward 50% of nearline bits by the third quarter of fiscal 2027 and expects 44-terabyte HAMR drives to ship in the first half of calendar 2027, with cost per terabyte falling roughly 10% annually as those platforms scale.

The gap between 22% exabyte growth and 44% revenue growth is the whole story of this quarter. See how TIKR’s model prices that pricing power into WD stock, free →

TIKR Values WD Stock at $1,448, Pricing In Sustained Pricing Power Through 2031

TIKR’s mid-case model values Western Digital at $1,448 by June 2031, implying a 197% total return from the current price of $487, or 25% annualized over 4.9 years.

That annualized rate sits well above what most established hardware suppliers offer investors today, reflecting a model that treats WD stock less like a mature component maker and more like a compounding beneficiary of the AI storage buildout.

The target rests on the same dynamic visible in the fourth quarter: price per terabyte climbing in the high teens even as unit growth normalizes, gross margin expanding past 1,300 basis points year over year, and a guide that already points to 45% revenue growth next quarter. Sustained execution on the ePMR and HAMR roadmap keeps that combination intact through the model’s realization date.

Western Digital just showed how much of its earnings power comes from pricing, not just volume. See the full model behind the $1,448 target, free →

Should You Invest in Western Digital Corporation?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Western Digital Corporation stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Western Digital Corporation alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!