April 30 (Reuters) – Western Digital forecast quarterly revenue above Wall Street estimates on Thursday, expecting strong demand for data storage from artificial intelligence companies to fuel pricing power.
Shares of the company, however, fell nearly 5% in extended trading.
As of Thursday’s close, Western Digital’s shares had more than doubled this year, as Big Tech’s heavy spending on AI infrastructure has created massive demand for its high-capacity hard disk drives.
AI inference requires storage of massive amounts of data on higher-capacity drives. This demand-supply dynamic has given the company significant pricing power.
It expects revenue of $3.65 billion for the fourth quarter, plus or minus $100 million, compared with analysts’ average estimate of $3.46 billion, according to data compiled by LSEG.
Since separating from its flash memory business in early 2025, now Sandisk, Western has been able to focus entirely on the data center market.
The company’s strong free cash flow generation has also enabled aggressive capital returns. In February, it announced a new $4 billion share buyback program, on top of a previous $2 billion program.
It reported a 45% rise in third-quarter revenue to $3.34 billion, beating estimates of $3.25 billion. Adjusted profit came in at $2.72 per share, compared with estimates of $2.39 apiece.
Shares of data storage companies surged earlier this week after peer Seagate forecast strong revenue and profit, signaling that enterprise spending will remain strong.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Sahal Muhammed)
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