Western Digital: 3 Key Takeaways for Long-Term Investors
On its first quarter of fiscal 2027 earnings call, held on Oct. 22, 2026, Western Digital (NASDAQ:WDC) announced revenue grew 55% year over year to $4.4 billion on expanding cloud storage demand. The performance proves that data growth from artificial intelligence requires massive physical storage capacity, giving the business strong pricing power and expanding profit margins. Cash flow generation is allowing management to raise the quarterly dividend while paying down debt. Three takeaways from the call reveal why the business is well positioned over the long term.
Western Digital is boosting storage capacity by moving customers to energy-assisted perpendicular magnetic recording technology (ePMR), which packs more data onto existing disk platters. This transition lets the business deliver higher storage volume without increasing capital expenditures or spending on equipment and facilities to build new factories.
By shipping higher-capacity hard drives and renegotiating long-term customer contracts, Western Digital expanded its gross margin, or the percentage of revenue remaining after direct manufacturing costs, to 58%. Customers pay more per terabyte because denser drives lower power consumption and server floor space costs in data centers.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.