Could You Have Seen The Run In Western Digital Stock Coming

Shares of Western Digital (WDC)returned 214.3% over the twelve months ending October 6, 2026. By comparison, the S&P 500 gained 17.8% over the same period. News reports published during the rally noted that artificial intelligence companies needed immense amounts of data storage, giving Western Digital the leverage to charge more for its hard disk drives. So how much of this could investors see before October 2025?

What Did Western Digital Say Before The Run?

Western Digital was reporting rapid growth in its hard drive business nearly a year before the twelve-month stretch began. During its fiscal Q1 2025 earnings call on October 24, 2024, the company announced hard disk revenue of $2.2 billion. That figure represented an 85% increase from a year earlier. While Western Digital still operated a flash memory business at the time, executives confirmed by the January 29, 2025 call that they were in the final stages of separating the two divisions.

The clearest indicator of future pricing power emerged during the fiscal Q3 2025 call on April 30, 2025. Western Digital told investors that demand from its largest cloud customers remained "robust in a tight supply environment." When demand runs high and supply falls short, sellers generally gain the leverage to raise prices. Subsequent news reports ultimately tied the stock performance to Western Digital's room to charge more. However, executives issued a clear warning alongside those positive indicators. During the same call, management described the operating environment as highly uncertain and volatile, largely because of tariffs.

Regulatory filings provided additional evidence of improving profitability. Western Digital increased its operating margin from 24.4% in fiscal Q3 2025 to 26.1% in fiscal Q4 2025. The company filed its annual report covering that quarter on August 14, 2025. By then, the shares had already climbed sharply from their lows earlier in the year. All of this financial data was public at the time, though the earlier warnings regarding tariffs made the positive signals easy for investors to discount.

Where Western Digital's Revenue Came From By August 2026

By the time Western Digital held its fiscal Q4 2026 earnings call on August 5, 2026, cloud customers generated most of its business. These clients accounted for 89% of revenue during that quarter. Cloud revenue was $3.3 billion, representing a 43% increase from a year earlier.

Pricing metrics moved higher alongside revenue. Management reported that the blended average price per terabyte of storage increased by a high-teens percentage from a year earlier. That acceleration followed a high single-digit rise just one quarter before.

Western Digital was not the only beneficiary of these industry conditions. Rival manufacturer Seagate Technology returned 222.1% over the same twelve months. That parallel performance suggests investors were repricing the broader data storage sector rather than reacting exclusively to one company.

Is Western Digital Still Shipping More Storage?

Western Digital is still expanding its output, though the pace has slowed. The company shipped 231 exabytes of storage capacity in fiscal Q4 2026, achieving a 22% increase from a year earlier. While that quarter trailed the 25% growth recorded for the entirety of fiscal 2026, executives project that demand will continue growing at more than 25%. Management noted that quarterly shipment volumes naturally fluctuate based on the specific mix of products it ships.

Looking ahead to fiscal Q1 2027, the company forecast revenue of $4.1 billion, plus or minus $100 million. That compares favorably to the $3.75 billion reported for Q4. Yet the shares still fell 13% in trading on August 6, 2026. The decline occurred after the company forecast an adjusted gross margin of 55% to 56%, which fell short of the higher expectations that rival Seagate had set. Over the past three months, the stock is down 29%, trailing a 3.7% gain for the S&P 500. It now trades 44.7% below its 52-week closing high of $745.99.

Western Digital has yet to report fiscal Q1 2027. If the upcoming report shows shipment growth above 25%, it would support management's view that demand for data storage is still building at that pace.

Does This Mean You Should Act On WDC?

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