Western Digital Targets 50% Gross Margin, EPS $20+ with 2026 HDD Sold Out
Western Digital management projects a floor EPS of $20 and aims for over 50% gross margin and 40% EBIT, driven by AI video acceleration and hyperscaler contracts extending through 2028. Sold out 2026 HDD capacity with 89% revenue tied to hyperscaler data centers and price targets up to $379.
1. Investor Conference Guidance
Western Digital’s CFO and CEO outlined a floor EPS of $20 alongside targets of over 50% gross margin and 40% EBIT, attributing future growth to AI-generated video acceleration and data-centric demand. Management described this as the baseline for a strategic shift toward a growth-focused model over the next three to five years.
2. Hyperscaler Contracts and Capacity Sell-Out
The company reported that its 2026 HDD capacity is fully booked, with hyperscaler data center partnerships accounting for 89% of expected revenue and supply agreements extending through 2028. This long-term visibility underscores Western Digital’s positioning as a key AI-driven mass storage provider.
3. Analyst Ratings and Price Targets
Analysts maintain overweight ratings on the stock, setting a consensus price target of $321 and modeling highs up to $379. These projections reflect confidence in sustained margin expansion and the company’s secured revenue backlog.