Western Digital reported fiscal Q2 non-GAAP revenue of $2.9 billion, marking a 20% year-over-year increase driven by robust data center demand for high-capacity hard disk drives. The company beat consensus revenue estimates by 3.4% and surpassed adjusted EPS forecasts by nearly 13%, reflecting operational leverage in its core HDD business and resilient contract volumes with hyperscale customers.

Shares of Western Digital trade at approximately 35 times trailing earnings, compared with a 10-year median of 18 times, reflecting investor confidence in the secular data center build-out. Analysts forecast roughly 35% annual EPS growth and 17% annual revenue growth over the next several years, though consensus estimates may prove conservative if AI-driven storage requirements continue to accelerate. On a forward basis, the stock sits around 22 times fiscal 2027 earnings, suggesting room for multiple expansion if growth targets are met.

Western Digital holds about 62.8% share of the global HDD market, outpacing its closest competitor’s 37.2% share, and participates in a 70%-consolidated enterprise SSD segment alongside key peers. Hyperscale customers are expected to spend roughly $400 billion on AI hardware this year, a trend that benefits Western Digital’s high-capacity drives. As AI training shifts toward video and image models requiring multi-terabyte storage pools, the company’s scale and ‘sticky’ multi-year contracts position it to sustain margin stability and revenue momentum.