What happened
Western Digital forecasts fourth-quarter revenue of $3.65 billion, plus or minus $100 million, exceeding analysts' average estimate of $3.46 billion. This projection stems from strong demand for high-capacity data storage from AI companies, which grants Western Digital significant pricing power. The company reported a 45% rise in third-quarter revenue to $3.34 billion, surpassing estimates of $3.25 billion, with adjusted profit reaching $2.72 per share against $2.39 estimates. Western Digital separated from its flash memory business in early 2025 to focus on the data centre market.
Why it matters
AI infrastructure spending continues to reshape hardware market dynamics, increasing demand for high-capacity storage. Data centre architects and procurement teams face sustained pricing pressure for essential components as AI inference workloads require massive data volumes. This follows similar strong forecasts from peer Seagate, indicating a broader trend of enterprise spending prioritising AI-driven storage solutions. The shift allows suppliers like Western Digital to generate strong free cash flow, enabling capital returns such as its new $4 billion share buyback program.
