Western Digital Reports 27% Revenue Growth in 2025 Driven by AI Demand

Written by Emily J. Thompson, Senior Investment Analyst

WDC+6.81%

PLTR+0.36%

Source: Fool

Updated: 10h ago

0mins

Source: Fool

Significant Revenue Growth: Western Digital reported a revenue of $2.8 billion in Q1 FY2026, reflecting a 27% year-over-year increase, indicating the company's strong position in the rapidly growing AI data center market, which further solidifies its market leadership.
Enhanced Profitability: The company's non-GAAP earnings per share surged by 137% to $1.78, demonstrating a significant improvement in profitability amid soaring demand, suggesting a strong potential for sustained growth in the future.
Robust Market Demand: Global data generation is expected to triple by 2028, with AI driving a 131% increase in HDD shipments from 2024 to 2028, providing Western Digital with substantial market opportunities.
Attractive Investment Value: Western Digital's stock trades at just 23 times forward earnings, below the Nasdaq-100 index's average of 33, and if earnings reach $9.67 per share, the stock price could rise by 45% in the next 18 months, highlighting its investment appeal.

WDC

$200.46+Infinity%1D

Analyst Views on WDC

Wall Street analysts forecast WDC stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for WDC is 181.63 USD with a low forecast of 135.00 USD and a high forecast of 250.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

19 Analyst Rating

15 Buy

4 Hold

0 Sell

Strong Buy

Current: 187.680

Low

135.00

Averages

181.63

High

250.00

Current: 187.680

Low

135.00

Averages

181.63

High

250.00

Mizuho

Outperform

upgrade

$180 -> $240

2026-01-09

New

Reason

Mizuho

Price Target

$180 -> $240

2026-01-09

New

upgrade

Outperform

Reason

Mizuho raised the firm's price target on Western Digital to $240 from $180 and keeps an Outperform rating on the shares. The firm adjusted targets in the semiconductors and semiconductor capital equipment group as part of its 2026 outlook. Mizuho sees continued upside for the group in 2026 due to "attractive valuations," but more modest than 2025. The analyst' top sectors in 2026 are AI accelerators and wafter fab equipment, Optical, and memory, while the firm remains cautious on electric vehicles, autos and analog as well as computers and handsets. Mizuho's top picks for 2026 are Nvidia, Lumentum and Broadcom.

Morgan Stanley

Overweight

maintain

$188 -> $228

2025-12-17

Reason

Morgan Stanley

Price Target

$188 -> $228

2025-12-17

maintain

Overweight

Reason

Morgan Stanley raised the firm's price target on Western Digital (WDC) to $228 from $188 and keeps an Overweight rating on the shares. Among the IT Hardware group, the firm recommends being overweight cloud capex winners, product-cycle beneficiaries such as Apple, and unique assets, while it suggests being underweight stocks with elevated memory exposure - like Dell (DELL) and HP (HPQ) - and is "increasingly more cautious" on memory-exposed names as well, the analyst tells investors in a year-ahead note.

Cantor Fitzgerald

C.J. Muse

Overweight

maintain

$200 -> $250

2025-12-16

Reason

Cantor Fitzgerald

C.J. Muse

Price Target

$200 -> $250

2025-12-16

maintain

Overweight

Reason

Cantor Fitzgerald analyst C.J. Muse raised the firm's price target on Western Digital to $250 from $200 and keeps an Overweight rating on the shares. The SOX is positioned to lead markets higher after outperforming the S&P by roughly 30 points in CY25, supported by the early stages of the AI era driving demand across compute, networking, memory, and equipment, the analyst tells investors in a research note. While cyclical factors may create mixed signals, the macro backdrop and expected exponential growth in AI infrastructure spending support a long position in the SOX and overweight exposure to AI-related plays into CY26, the firm says.

China Renaissance

initiated

$193

2025-12-05

Reason

China Renaissance

Price Target

$193

2025-12-05

initiated

Reason

China Renaissance initiated coverage of Western Digital with a Buy rating and $193 price target.

About WDC

Western Digital Corporation is a developer, manufacturer and provider of data storage devices and solutions. It delivers hard disk drives (HDD) solutions for everyone from students, gamers, and home offices to enterprises and public clouds. The Company manufactures, markets, and sells data storage devices and solutions in the United States and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries. Its portfolio of technology and products addresses multiple end markets: Cloud, Client, and Consumer. Cloud is comprised primarily of products for public or private cloud environments and end customers. Through the Client end market, it provides its original equipment manufacturer (OEM) and channel customers a range of hard drive solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces. The Consumer end market offers a range of retail and other end-user products.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.