Shares of Western Digital Corp. surged on Friday after the data-storage company reported better-than-expected fiscal first-quarter earnings and stronger guidance, buoyed by continued demand from hyperscaler customers building artificial-intelligence infrastructure.
The company’s results and outlook reinforced optimism that the AI-driven storage boom remains far from over.
Western Digital’s stock jumped 14% to $157.65 on Friday, extending its stellar run this year.
The stock also hit its 52-week high during the session.
At the time of writing, the stock was trading at $148.24, up by 7%.
The shares have soared more than 229% year to date.
Earnings beat and expanding margins
For the quarter ended in September, Western Digital posted earnings of $1.78 per share, beating both its own guidance and Wall Street estimates of $1.59 per share.
Revenue came in at $2.82 billion, up 27% from the same period last year and ahead of analysts’ expectations of $2.73 billion.
The company’s gross margin widened significantly to 43.9%, compared with 37.3% a year earlier, reflecting stronger pricing power and an improving product mix.
The robust quarter was driven by sustained demand for hard disk drives (HDDs), particularly from cloud computing and AI-focused customers.
“Looking ahead, we’re excited about the opportunities AI continues to unlock for our business even as we navigate macroeconomic uncertainties,” said CEO Irving Tan on a conference call.
Tan also noted that the company’s top seven customers have placed purchase orders through at least the first half of next year, while one major hyperscaler has signed an agreement extending through 2027.
Strong guidance and analyst optimism
Western Digital provided upbeat guidance for its second fiscal quarter, forecasting revenue of about $2.9 billion, plus or minus $100 million.
That range sits above analysts’ average forecast of $2.83 billion.
The company expects gross margins to expand further, reaching between 44% and 45%.
Analysts broadly welcomed the results. “Another impressive beat and guidance underscores the strong demand for HDDs,” wrote Evercore ISI analysts Amit Daryanani and Irvin Liu in a research note.
They added that the ongoing shift toward higher-capacity drives should support continued margin expansion.
Evercore reiterated its Outperform rating and $190 price target on Western Digital stock.
Benchmark Equity Research analyst Mark Miller also credited the performance to sustained capital spending by technology companies building out AI and data center capacity.
Benchmark maintained a Buy rating and said it is in the process of raising its price target following the earnings report.
AI boom fuels sector-wide rally
The surge in Western Digital shares follows similarly strong results from Seagate Technology Holdings, which earlier this week reported revenue and profit above estimates.
Seagate’s stock has risen more than 22% since its report.
Both companies have benefited from the ongoing global race to expand AI-related data infrastructure, which has driven massive investment in storage capacity.
According to Goldman Sachs, global AI infrastructure spending could reach $3 trillion to $4 trillion by 2030.
Western Digital and Seagate are now the second and third-best performers on the S&P 500 this year, trailing only Robinhood Markets.
Meanwhile, Sandisk, spun out of Western Digital in February, has seen its shares rise fivefold ahead of its November 6 earnings report.
The broader S&P 1500 technology hardware, storage, and peripherals sector has jumped more than 12% in 2025, hitting a record high on Friday.
“If you went back twelve or twenty-four months and you asked somebody about AI, they wouldn’t have talked about hard disks,” said Martin Frandsen, portfolio manager at Principal Asset Management. “It’s exciting.”
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