Western Digital falls 3.0% after fiscal Q1 results and upbeat guidance

What happened

Western Digital (WDC) fell 3.0% on October 23, 2026, because of fiscal first-quarter results and accompanying guidance that investors weighed against supply and capex concerns. The stock closed at $343.67 after the company reported revenue and earnings that beat expectations, management highlighted strong demand for high-capacity HDDs including from AI and cloud customers, and the firm gave fiscal second-quarter guidance centered on $5.1 billion. Trading volume was 1.5 times its 20-day average as the broader S&P 500 fell 0.5% and the Technology sector median rose 0.2% on the day.

How big was the move

The stock’s fall of 3.0% was 0.7 times a typical daily move for this stock, with performance that was 3.2 percentage points worse than the sector median. Over the last five sessions the stock rose 3.5% while the S&P 500 over five sessions fell 0.5%. Western Digital’s market value stood at $124.28 billion, and the stock’s market sensitivity is reflected in a beta of 2.29, meaning the stock tends to move more than the market.

The technical picture

Technically, the stock traded well below its recent averages. The stock was 13.0% below its 20-day moving average, 20.6% below its 50-day moving average and 17.1% below its 200-day moving average. The 50-day average is above the 200-day average, a sign of an established uptrend. The Relative Strength Index (14 days) was 36, in a neutral range between 30 and 70. The stock was 57.0% below its 52-week high. It fell 23.7% over one month and 31.0% over three months. Volatility was 69% annualized over 60 days, higher than 83% of its own readings over five years. Over one year the stock rose 185.3%, 171.5 percentage points ahead of the S&P 500.

Fundamentals and valuation

For the four quarters through October 2, 2026, Western Digital reported revenue of $14.48 billion, which grew 43.0% from a year earlier, and diluted earnings per share of $26.38, which rose 283.4% from a year earlier. Gross margin expanded to 52.6% from 40.6% a year earlier, and operating margin widened to 39.4% from 27.6%. Free-cash-flow margin was 29.6%, and return on invested capital stood at 40.2%. The balance sheet showed net cash of $525.0 million, while share count over one year increased by 2.1%.

On valuation, the stock traded at 13.0 times trailing earnings, lower than 62% of its own readings over the past five years, where the five-year median is 14.4 times earnings. Price to forward earnings was 16.7 times expected earnings, and free-cash-flow yield was 3.5%. Those multiples suggest the market is pricing in strong growth but also reflecting part of the recent pullback in the stock.

Earnings and analyst expectations

Western Digital reported last on October 22, 2026, with non-GAAP earnings per share of $4.64 against $4.11 expected, 12.9% above estimates, marking 15 consecutive quarters beating estimates. The company said fiscal first-quarter 2027 results showed revenue of $4.38–$4.4 billion, a 55% year-over-year increase, and reported exabytes shipped were 248, up 22% year over year. Management said cloud revenue was $3.9 billion, about 88% of total, and fiscal Q1 generated $1.4 billion in free cash flow.

Analysts’ consensus price target was $619.67, 80.3% above the closing price, based on 61 analysts with rating coverage; 72% of those ratings were Buy or Strong Buy and the consensus rating was Buy. The company’s average surprise over the last four reports was 11.2% above estimates, and typical two-day reactions after recent reports were unchanged. The next report date listed in the data was October 29, 2026.

What to watch

• October 29, 2026: next report date listed in the data
• Guidance centered on $5.1 billion for fiscal second quarter 2027, with revenue growth of 66% to 72% year over year and adjusted gross margin projected at 60% to 61%
• Cloud revenue of $3.9 billion in fiscal Q1, about 88% of total, and exabytes shipped of 248 (up 22% YoY)
• Free cash flow of $1.4 billion generated in fiscal Q1 and free-cash-flow margin of 29.6%
• Consensus price target of $619.67 and 72% of analyst ratings at Buy or Strong Buy