Western Digital reported non-GAAP revenue of $2.9 billion for fiscal Q2 2026, marking a 20% year-over-year increase driven by robust data center demand. High-capacity hard disk drives accounted for the majority of sales growth, with enterprise customers expanding their storage footprints for AI and cloud workloads. The company’s gross margin improved by 150 basis points compared to the prior year, reflecting operational leverage and improving pricing trends in high-density storage solutions.

In Q3 2025, Western Digital delivered non-GAAP earnings per share 13% above consensus forecasts and surpassed revenue estimates by 3.4%, excluding non-recurring items. Analysts now project approximately 35% annual EPS growth over the next three years and about 17% annual revenue growth, a notable upward revision from previous estimates. The consensus price-to-earnings multiple has expanded from a 10-year median of 18× to around 35×, reflecting growing confidence in sustained demand from hyperscale customers.

Western Digital holds roughly 62.8% share of the global hard disk drive market, positioning it as the industry leader ahead of its closest competitor at 37.2%. In the enterprise SSD segment, the combined market share of Western Digital (including SanDisk), Samsung, Micron, and Intel stands at approximately 70%. Hyperscale data center operators are expected to invest over $400 billion in AI-related hardware this year, and Western Digital’s product roadmap emphasizes next-generation high-capacity drives tailored for video and image model training. Management anticipates that continued build-outs and contract renewals will support further upside, potentially pushing the company’s valuation closer to 50× forward earnings if commitments from large cloud providers hold.