Key Points
Western Digital (NASDAQ: WDC) stock plunged 11.7% through 10:30 a.m. ET Thursday despite beating on both sales and earnings last night.
In its fiscal Q4 2026 update, analysts had expected Western Digital to report only $3.29 per share on sales of less than $3.7 billion. In fact, WD earned $3.56 per share on sales of $3.75 billion.
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Western Digital Q4 earnings: by the numbers
What’s wrong with that? Not a lot!
Growing demand for computer memory of all types to support the artificial intelligence revolution drove Western Digital’s sales up 44% year over year, and produced GAAP earnings of $8.21 per share — up 1,125% year over year. (The “$3.56” per share profit was only a non-GAAP number — but even non-GAAP earnings more than doubled.)
What’s more, WD’s Q4 numbers showed the company accelerating in the year’s final quarter. Full-year sales grew “only” 36%, and full-year GAAP earnings were up “only” 446%!
What’s next for Western Digital stock?
Nor is Western Digital slowing down. Turning to guidance, the computer memory specialist expects sales to grow at least 42% and perhaps as fast as 49% in fiscal Q1 2027. (That’s the quarter we are in now.) Taken at the midpoint, that’s even more acceleration from the already accelerating pace set in Q4.
Notably, this guidance exceeded analyst expectations, which has WD pegged for between $4 billion and $4.2 billion in Q1 sales, and (presumably non-GAAP again) earnings between $3.85 and $4.15.
In short, there’s a lot to like about Western Digital’s report last night, and very little for investors to be upset about. Investors are wrong to sell it today — and I expect today’s losses to reverse in short order.
Should you buy stock in Western Digital right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Western Digital. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
