Western Digital stock soars as AI drives 45% revenue jump

A company that makes the kind of hardware most people take for granted, the hard drives storing the world’s data, is suddenly one of Wall Street’s most closely watched names. Western Digital touched a new 52-week high of $480.11 today, with shares climbing more than 5% during the session and continuing a rally that has sent the stock up 890% over the past twelve months. The catalyst is an earnings report that delivered exactly what investors had been hoping to see, and forward guidance that suggests the momentum has not yet peaked.

The quarter that set a company record

Western Digital reported its fiscal third-quarter 2026 results after the market closed on April 30, and the numbers landed well above expectations on every major metric. Revenue rose 45% year over year to $3.34 billion, beating analyst estimates of $3.23 billion. Adjusted earnings per share came in at $2.72, ahead of the $2.36 consensus and up roughly 97% from the same quarter a year earlier.

What stood out even beyond the headline figures was the margin performance. Western Digital’s non-GAAP gross margin reached 50.5% for the quarter, crossing the 50% threshold for the first time in company history. Non-GAAP operating margins came in at 38.6%, reflecting the pricing power the company has gained as demand for high-capacity hard disk drives has consistently outpaced available supply. The company also raised its quarterly dividend by 20%, a direct signal from management that it expects strong cash flow to continue well into the future.

What AI has to do with hard drives

The demand surge driving Western Digital’s results is directly tied to the buildout of AI infrastructure. As cloud companies and hyperscale data centers expand to handle the data storage demands of modern AI workloads, high-capacity hard drives have become a critical and constrained resource. Management noted that HDD capacity is fully committed through 2026, with long-term customer agreements extending well into 2027 and 2028, and in some cases reaching 2029.

That level of forward visibility is unusual in the hardware business, which has historically been cyclical and difficult to forecast. It points to a structural shift in how storage is being treated within the AI infrastructure supply chain, less as a commodity input and more as a strategic asset.

What analysts are saying

The earnings beat triggered a broad and swift response across Wall Street. Baird moved its price target to $450 from $310. Goldman Sachs raised to $400 from $250. TD Cowen lifted its target to $500 from $325. Mizuho moved to $470 from $400. Cantor Fitzgerald raised its target sharply to $660 from $500. Among the 25 analysts currently covering the stock, 20 carry a Strong Buy rating, one has a Moderate Buy and four recommend a Hold. The mean price target stands near $450, while the highest published target reaches $660, implying substantial additional upside from current levels.

Not every observer is equally enthusiastic. UBS raised its target to $375 from $350 but maintained a more cautious stance, flagging concerns about whether the current gross margin expansion is sustainable and whether the valuation is fully justified by long-term fundamentals. Insider selling filings in early May added a modest counterweight to an otherwise positive picture.

What the forward guidance suggests

For the fiscal fourth quarter, Western Digital guided for revenue of approximately $3.65 billion, non-GAAP gross margins of around 51.5% and non-GAAP diluted earnings per share of approximately $3.25. For the full fiscal year ending in June, analysts project earnings of $8.68 per share, representing a 91.6% increase year over year. The company has beaten consensus estimates in each of the last four consecutive quarters.

Western Digital’s 52-week low is $43.60. Its current price near $466 represents a gain of roughly ten times that figure in a single year, built on the straightforward premise that the world needs more storage, and that Western Digital is one of the few companies positioned to deliver it at scale.