Western Digital had another storming quarter, but investors still found enough to sulk about after hours.
According to Morningstar the storage outfit said fiscal fourth-quarter revenue rose 44 per cent year on year to $3.75 billion. Its non-GAAP gross margin expanded to 54.4 per cent, landing at or above the top end of guidance.
The snag was that revenue still came in a shade below expectations, thanks to weaker-than-expected exabyte growth. Pricing hikes were stronger than expected, but that was not enough to stop the shares wobbling.
Less excitable commentary than Seagate probably gave the market another excuse to mark Western Digital down. Even so, the results looked decent enough, with next-quarter guidance sitting comfortably ahead of expectations.
Western Digital said demand and visibility remained positive, with long-term customer agreements now being discussed through calendar 2031. Demand is broadening beyond hyperscalers into neoclouds, frontier labs, sovereign deployments, enterprise systems and physical AI applications.
Morningstar lifted its fair value estimate to $420 a share from $415, after raising near-term EPS estimates by 25 per cent for 2027 and 29 per cent for 2028. Shares fell 10 per cent after hours to about $465, well below their recent peak of nearly $750, while Morningstar now models a five-year EPS CAGR of 51 per cent and a seven per cent near-line pricing CAGR through 2031.
