Bank of America analysts have reaffirmed their bullish stance on Western Digital, citing a structural upcycle driven by AI and cloud infrastructure demand. The research team highlighted that ongoing supply constraints are supporting stable to higher pricing per terabyte, with gross margins forecast to expand each quarter next year and approach 50% by year end. The upgrade reflects increased confidence in both revenue growth and positive earnings revisions over the longer term.

Western Digital is expected to ship over 200 exabytes of storage capacity each quarter throughout calendar 2026, fueled by hyperscale data centers and AI training clusters. This volume represents a significant step up from prior levels and underscores the company’s ability to capture a growing share of mission-critical workloads. The tight supply environment has allowed Western Digital to maintain firm pricing power even as volumes ramp.

Analysts project Western Digital’s revenue will climb approximately 25% year-over-year to near $12 billion in 2026, driven by mix shifts toward higher-margin enterprise and cloud sales. Earnings per share are forecast to rise more than 50% to roughly $7.90, with further EPS growth expected into 2027 and 2028 as utilization remains high and fixed-cost leverage improves. These estimates have been revised upward by over 10% in recent months amid sustained demand strength.

Management has secured binding purchase agreements with five major enterprise and cloud customers covering all of next year, with at least one contract extending order visibility into 2027. These multi-year commitments underscore the strategic importance of Western Digital’s storage solutions for AI-driven infrastructure and provide clear revenue and volume visibility, reducing execution risk and supporting margin expansion during an extended upcycle.