Western Digital Shares Soar 11% on Seagate’s 22% Revenue Growth, 76% Income Jump
Western Digital shares jumped nearly 11% on January 28, 2026 after Seagate’s 22% revenue growth and 76% net income surge topped analyst forecasts, reflecting heightened AI-driven storage demand. The sector-wide rally underscores tight supply dynamics and positions Western Digital for potential further gains ahead of its own earnings report.
1. Peer-Driven Rally Propels Western Digital Higher
On January 28, 2026, Western Digital shares climbed nearly 11% following a blockbuster earnings report from rival Seagate Technology. While Western Digital has not yet released its own quarterly results, investors bid up the stock on expectations that strong AI-driven demand for high-performance storage will benefit all major players. Over the past 12 months, Western Digital has delivered a total return of roughly 400%, underscoring the market’s growing confidence in the company’s ability to capture data-center spending.
2. Robust Demand Outlook Supports Revenue Growth
Western Digital is projecting non-GAAP revenue of $2.9 billion for fiscal Q2 2026, representing a 20% year-over-year increase. Management attributes this growth to sustained enterprise adoption of high-capacity hard drives and solid uptake of accelerated SSD products. Hyperscale customers have locked in purchase agreements that extend well into next year, and the company reports that backlog for its high-density devices now stretches into late 2026, providing a clear runway for continued top-line expansion.
3. Market Share and Profitability Metrics
In the global hard-disk drive segment, Western Digital holds approximately 62.8% market share versus its closest competitor’s 37.2%. During Q3 fiscal 2025, the company generated $1.2 billion in net income, driving a gross margin of roughly 42%. Analysts forecast annual EPS growth of around 35% over the next three years, coupled with revenue growth of about 17% per annum. These projections reflect both tight industry supply and Western Digital’s ability to raise average selling prices per terabyte without materially increasing production capacity.
4. Valuation and Upcoming Catalyst
Western Digital currently trades at approximately 22 times forward FY2027 earnings—below the premium levels seen in previous AI-led rallies. With consensus estimates rising and order books remaining full, the release of Western Digital’s Q2 earnings report will be a key catalyst for investors seeking confirmation of sustained margin expansion and guidance for the back half of fiscal 2026. A strong beat could prompt further multiple expansion, while any signs of softened demand might trigger a re-rating toward historical average valuations.