Western Digital Q3 Beats Estimates on AI HDD Demand

Western Digital Corporation reported fiscal third-quarter results that exceeded Wall Street expectations, fueled by surging demand for high-capacity hard disk drives amid the artificial intelligence boom, though its shares dipped in after-hours trading Thursday.

The San Jose, California-based data storage company posted revenue of $3.34 billion for the period ended April 3, 2026, up 45 percent from the year-earlier quarter and above analysts' average estimate of $3.25 billion. Non-GAAP earnings per share came in at $2.72, nearly double the prior-year figure and surpassing forecasts of about $2.39 to $2.41 per share. Gross margins expanded to 50.5 percent, a 1,040 basis-point improvement year over year, driven by a shift to higher-capacity drives, improved pricing and cost controls.

Cloud revenue, which accounted for 89 percent of the total at $3.0 billion, rose 48 percent year over year, while consumer and client segments grew 24 percent and 31 percent, respectively. The company shipped 222 exabytes of storage, up 34 percent, including significant volumes of its latest EPMR products up to 32 terabytes.

CEO Irving Tan attributed the performance to AI-driven data growth. "Virtually...