Western Digital Corporation (WDC)
POSITIVEFundamental
68
Price
$443.68
Market Cap
$156.97B
Part 1 · What the company is worth
Overview
Western Digital makes hard disk drives, the spinning-platter storage technology that still holds most of the world's data despite decades of competition from flash memory, because it remains far cheaper per gigabyte for storing huge, infrequently accessed volumes of information. Its main customers are cloud and data-center operators who buy drives by the tens of thousands; a smaller business sells storage to PC makers and consumers. In early 2025 the company completed the separation of its flash memory business, SanDisk, leaving Western Digital a pure hard-drive company.
How it makes money
Nearly all revenue now comes from selling physical hard drives, mostly under negotiated bulk contracts with cloud and enterprise customers whose orders track their own data-center capacity expansion plans. A much smaller share comes from client devices (drives built into PCs and other equipment) and consumer retail products (external hard drives). Because most output goes to a handful of very large buyers, pricing and volumes swing with their capacity-spending cycles rather than with steady end-consumer demand.
Revenue by segment
High-capacity drives sold to cloud and enterprise data-center operators; now by far the dominant end market.
Retail external hard drives and other storage products sold directly to individual consumers.
Drives sold to PC and other equipment manufacturers for integration into their own products.
Competitive moat
Scale · NarrowDecades of industry consolidation have left only two significant hard-drive makers, Western Digital and Seagate, so the huge fixed cost of precision drive manufacturing is now a real barrier to new entrants. But the product is still a commodity component that customers can dual-source, and buyers with far more scale than Western Digital can push back hard on price, so the advantage does not extend to pricing power.
What drives demand
CyclicalThe hard-drive industry has a long history of swinging between shortage, when prices and margins are strong, and glut, when they collapse, driven by how much data-center capacity a handful of huge cloud buyers decide to build in any given period. Western Digital posted losses as recently as 2023-2024 during a downturn, showing how quickly favorable pricing can reverse if cloud demand or capacity plans change.
Key risks
- Revenue concentrated among hyperscale customers — A small group of very large cloud customers drives the great majority of revenue, so a pullback, renegotiation or dual-sourcing decision by even one of them can move results significantly.
- Lumpy, sporadic hyperscale demand — Hyperscale customers order in connection with large, sporadic data-center build-outs and can request significant volumes on short lead times, making demand far less steady than consumer-driven sales and putting pressure on Western Digital's ability to plan capacity.
- Pricing and industry cyclicality — Today's favorable pricing environment is not guaranteed to persist; the industry has a history of sharp swings in revenue and cash flow, including losses in 2023-2024, and a shift in cloud demand or pricing could quickly pressure margins again.
- Customer bargaining power — Customers can choose among a variety of suppliers, giving them substantial leverage on pricing and contract terms and often shifting risk and cost onto Western Digital as the supplier.
Customer concentration
Top customers account for 71% of revenue
Western Digital's ten largest customers account for roughly 71% of revenue, concentrated among a handful of hyperscale cloud operators whose order timing and volumes drive the great majority of results.
The case for
Buyers argue that AI-driven data growth is fueling unprecedented demand for high-capacity cloud storage, that the industry's consolidation down to two real hard-drive makers gives Western Digital durable pricing power in the current cycle, and that focusing purely on hard drives after the SanDisk separation lets management run a simpler, higher-margin business.
The case against
Sellers fear that revenue this concentrated among a handful of hyperscale buyers leaves Western Digital exposed to a single customer's capacity-spending decision, that the industry's long history of boom-and-bust pricing means today's strong margins are unlikely to be permanent, and that hyperscale customers' bargaining power will erode pricing once capacity tightness eases.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
No editorial profile for this company yet
No competitor list for this company yet.
Balance Sheet & Liquidity
Revenue
$12.92B
Trailing 12 months (through 7/3/2026)
Net Income
$9.42B
Trailing 12 months (through 7/3/2026)
Free Cash Flow
$3.51B
Total Equity
$8.86B
Total Liabilities
$5.00B
Current Ratio
1.33
Interest Coverage
26.99
Debt/EBITDA
0.25
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$587.34
Current Price
$443.68
Margin of Safety
+24.5%
Fair Value Range
$381.77 - $792.91
Estimation Methods
Valuation Metrics
P/E Ratio
17.93
ROE
106.3%
P/B Ratio
17.71
P/FCF
44.71
Gross Margin
48.9%
ROIC
36.6%
Profitability Radar
Value Creation (Economic Moat)
ROIC
36.6%
WACC
16.3%
ROIC − WACC
+20.3 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (19)
- EPS shows upward trend
- EPS CAGR 10.79%
- Price CAGR 24.50%
- ROIC 36.6%
- Gross Margin 48.9%
- Debt/Equity ratio
- Operating Margin 34.5%
- Positive Free Cash Flow
- CapEx intensity
- Current Ratio
- Interest Coverage
- Debt/EBITDA
- Return on Tangible Assets
- ROE 117.8%
- Analyst Consensus 83% Buy
- Earnings Surprise avg 10.3%
- PEG Ratio 0.30
- Net Margin Trend 72.9% vs 19.8%
- Piotroski F-Score 7/9
Failed (8)
- P/FCF 44.71
- P/B Ratio 17.71
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- Revenue Growth 5Y -5.3%
- Earnings Quality (OCF/NI) 0.42
- Share Dilution 5.2%
Unavailable (1)
- Dividend Payout NaN%
Piotroski F-Score
Strong financial health
Earnings Quality
Low quality: investigate accounting
Share Dilution
Issuing new shares, diluting ownership
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Tiang Yew Tan | CEO & Director | 55 |
| Mr. Kris A. Sennesael | Executive VP & CFO | 56 |
Audit Risk
10
Board Risk
3
Compensation Risk
3
Shareholder Rights Risk
5
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for WDC, sourced from Markets Gazette.
- 11d agoPOSITIVEPerché le azioni SanDisk salgono del 6% oggi, oltre +30% nella settimana
Western Digital Corporation (formerly SanDisk) shares surged approximately 6% on Friday, extending their weekly gains to around 34%. This rally follows the company's Investor Day, where management presented ambitious financial targets and detailed how AI-driven demand is poised to reshape the NAND flash memory market. Analysts are increasingly optimistic, citing Western Digital's growing exposure to AI infrastructure and its strategic shift towards long-term supply agreements. The positive sentiment from Wall Street underscores confidence in the company's long-term strategy, particularly its positioning within the burgeoning AI sector.
- 7/1/2026NEGATIVESandisk’s and Micron’s stocks sink as the rotation trade builds, but supply shortages should limit losses
Western Digital Corporation (WDC) and Micron Technology, Inc. (MU) experienced significant stock declines as investors shifted towards a 'rotation trade' strategy. Despite the immediate downturn, analysts suggest that persistent supply shortages in the memory chip market are likely to mitigate the extent of these losses. Bank of America highlighted that a substantial portion of Western Digital's future revenue may stem from new business model contracts, which are expected to offer improved revenue visibility. This suggests a potential underlying strength despite current market sentiment.
- 6/20/2026POSITIVESandisk Stock Is Up More Than 5,900% Since It Spun Off From Western Digital. Is It Too Late to Buy?
Western Digital's strategic decision to spin off its flash storage and memory businesses into SanDisk, which has since seen its stock surge over 5,900%, highlights a successful value-unlocking maneuver. While the spin-off occurred in February 2025, the article prompts investors to consider if further gains are possible. The substantial historical performance of SanDisk post-spin-off suggests that Western Digital's management may have a strong track record of identifying and executing profitable strategic initiatives, potentially benefiting remaining shareholders.
- 6/15/2026POSITIVEWhy Western Digital’s stock was the S&P 500’s biggest gainer on Monday
Western Digital Corporation (WDC) shares surged on Monday, becoming the top performer in the S&P 500 index. This significant gain is attributed to a broader investor enthusiasm for storage companies, driven by their perceived pricing power. The market is increasingly recognizing the potential for enhanced profitability within the storage sector, signaling a positive outlook for companies like Western Digital. This trend suggests that investors are re-evaluating the fundamental value and future earnings capacity of storage technology providers, potentially leading to sustained upward momentum for WDC stock.
- 6/8/2026POSITIVESanDisk Stock Has 35% More To Run, Analyst Says
Western Digital Corporation (WDC) shares surged following a significant upgrade from Bank of America, which raised its price target to $2,100. This optimistic outlook is underpinned by newly secured contracts and persistent memory supply constraints, suggesting a favorable market environment for the company's products. The analyst firm's action indicates strong conviction in WDC's future performance, potentially signaling a robust period of growth and profitability for investors.
- 6/1/2026POSITIVEAfter SanDisk's Historic Run, Analysts Still See More Upside
Analysts maintain a positive outlook on Western Digital Corporation (WDC), formerly known as SanDisk, citing expectations for continued upside potential. Despite a recent strong performance, the company's strategic positioning in the data storage market, particularly with its NAND flash memory solutions, is seen as a key driver for future growth. Investors are watching for sustained demand in enterprise and consumer electronics, which could further bolster WDC's market share and profitability. The company's innovation pipeline and potential for market share gains are key factors supporting the bullish sentiment.
- 5/6/2026POSITIVEThe latest sign of Sandisk’s ascent: It’s now bigger than the company that spun it off
Western Digital Corporation's stock has shown a significant upward trend following its separation from Sandisk. The spin-off has unlocked value for both entities, with Sandisk now surpassing its former parent company in market capitalization. This ascent is attributed to upbeat industry dynamics, suggesting a favorable market environment for storage solutions. Investors are likely to view this development positively, indicating successful strategic restructuring and potential for continued growth in the data storage sector.
- 5/5/2026POSITIVEThe latest sign of Sandisk’s ascent: It’s now bigger than Western Digital, which spun it off
Western Digital Corporation has seen its market capitalization surpass that of SanDisk, the company it spun off last year. This development highlights the successful unlocking of value for both entities following the separation. Positive industry dynamics have also contributed significantly to this upward trend. For investors, this indicates a potential strategic success in the spin-off and suggests that both companies are well-positioned within their respective market segments, warranting a closer look at their individual growth trajectories.
- 4/30/2026NEGATIVEThe memory trade is faltering as Western Digital’s stock slides in the face of earnings beat
Despite reporting earnings that surpassed analyst expectations, Western Digital Corporation (WDC) saw its stock price decline. This 'memory trade' faltering suggests that the market is looking beyond the immediate earnings beat. Investors appear to be reacting negatively to the stock's significant one-year rally, indicating a potential profit-taking sentiment or concerns about future growth prospects despite the positive quarterly results. The market's reaction highlights a disconnect between short-term financial performance and longer-term investor sentiment.
via Markets Gazette