On January 9 at 10:17 AM EST, Western Digital triggered a Power Inflow alert, a key order flow indicator that tracks institutional and retail buying pressure. The signal followed a near 3% decline in the hour leading up to the alert and was accompanied by a 5% intraday jump in share value. Traders who incorporate flow analytics cite this signal as evidence of sustained accumulation by large funds, suggesting further upside potential as the broader technology sector seeks stable revenue generators.

Western Digital significantly outperformed its AI software peers in 2025, with shares up 282% compared with a 135% gain at a major AI rival. The company now trades at 23 times forward earnings, well below sector multiples, bolstered by analysts’ forecasts of 58% non-GAAP earnings growth in the fiscal year ending July 2026. Management highlighted that cloud and hyperscale customers now represent nearly 90% of revenue, driving a 27% year-over-year increase in Q1 sales to $2.8 billion and a 137% jump in non-GAAP EPS to $1.78.

Hyperscale data center operators are extending lead times on high-capacity hard-disk drives, pushing unit shipments up significantly. Western Digital projects a 131% increase in HDD shipments between 2024 and 2028, as AI training and inference workloads demand exabyte-level storage. With supply constrained and no new capacity planned, the company anticipates continued pricing power, which could lift margins above the current 39.3% gross level and drive further top-line momentum in fiscal 2026 and beyond.