Western Digital Doubles Operating Profit and Boosts Revenue by 44% Amid AI Boom

Western Digital, a company concentrating on hard disk drives, benefited from the AI boom which drives demand for both fast SSDs and large-capacity traditional hard drives. In the fourth quarter of fiscal 2026, its revenue grew by 44% to $3.75 billion, and operating profit surged by 126% to $1.66 billion. Profit margins expanded significantly, with gross margin rising from 41.3% to 54.4% and operating margin from 28.1% to 44.2%. Earnings per share came in at $3.56, beating analyst expectations of $3.3, and revenue also exceeded forecasts. For the current quarter, the company projects revenue between $4.0 and $4.2 billion, with the midpoint slightly above the consensus estimate of $4.04 billion, and EPS of $4, also above expectations. Even with these strong results, Western Digital's stock fell 9% after the report because investors had anticipated a more optimistic revenue outlook. In the past quarter, 89% of WD's revenue came from the server segment, slightly down from 90% a year earlier, while the client segment's share rose from 5% to 6%, and consumer electronics remained at 5%. The company's business is highly dependent on the server and cloud segment, and revenue in the current quarter is expected to grow 42-49% year-over-year.