Western Digital has announced results that confirm one of the most significant shifts in the artificial intelligence infrastructure market: the competition is no longer solely about GPUs. Enterprise storage is once again becoming a major beneficiary of the AI data center boom, with increasing demand for high-capacity disks to support training, inference, and data archiving.
The company closed its fourth quarter of fiscal year 2026 with revenues of $3.747 billion, a 44% increase compared to the previous year, while its non-GAAP earnings per share doubled to $3.56. Additionally, it forecasts a rebound of between 42% and 49% during the first quarter of fiscal year 2027.
The key points about Western Digital in 20 seconds
- Revenues grew by 44% year-over-year to $3.747 billion.
- Gross margin now exceeds 54%, one of the highest levels in recent years.
- Demand for storage for AI and hyperscalers continues to accelerate.
- The company expects to generate around $4.1 billion in the upcoming quarter.
The picture is particularly interesting because it arrives just a few months after the final spin-off of Sandisk, which now operates as an independent company focused on flash memory and SSDs. Western Digital, on the other hand, has completely specialized in data center storage and large-scale infrastructure.
The big AI business is no longer just about GPUs
Over the past two years, market attention has been focused on NVIDIA, AMD, Broadcom, and the new accelerators developed by OpenAI, Anthropic, and major cloud providers.
However, training ever-larger models is causing another less visible bottleneck: storage.
Every AI cluster needs to store training datasets, checkpoints, logs, vector data, backups, and enormous volumes of information that cannot remain permanently in HBM or DRAM.
This is where Western Digital is seeing its business grow.
According to the company itself, the expansion of hyperscalers and data-intensive workloads is driving sustained demand for enterprise storage platforms, allowing it to increase both revenues and margins.
Profitability unseen in years
Beyond sales growth, margins reveal a true shift in the cycle.
During the quarter:
- Non-GAAP gross margin: 54.4% (41.3% a year earlier).
- Operating margin: 44.2%.
- Non-GAAP net profit: $1.382 billion (+130%).
For the full fiscal year 2026, Western Digital achieved:
- $12.919 billion in revenue (+36%).
- $4.817 billion in non-GAAP operating profit (+107%).
- $3.883 billion in non-GAAP net profit (+120%).
Cash generation also stands out, with $1.28 billion of free cash flow during the fourth quarter alone.
Sandisk and WD now represent two entirely different strategies
The Sandisk spin-off marks a turning point for both companies.
While Sandisk concentrates its investments on NAND memories, enterprise SSDs, and next-generation flash technologies, Western Digital can devote all its resources to very high-capacity hard drives and infrastructure for large data centers.
This specialization allows better response to a market where AI is creating two clearly differentiated needs:
- Ultrafast SSDs to power GPUs and accelerate inference.
- Massive, low-cost storage per terabyte to hold increasing amounts of data.
Storage is experiencing an extraordinary moment
Western Digital’s results also align with other signals from the industry over recent weeks.
Samsung, SK Hynix, and Micron continue to prioritize HBM memories destined for AI accelerators, reducing capacity dedicated to conventional DRAM and NAND.
At the same time, market reports suggest that Chinese manufacturers like CXMT are no longer competing solely through low prices. Recently published Asian media indicate they even refused to sell LPDDR5X memory to Apple at discounts, reflecting a market where supply remains limited and manufacturers have regained pricing power.
The result is a favorable scenario for the entire storage ecosystem.
Infrastructure is back in the spotlight
For years, it seemed that storage hardware was no longer strategic compared to the growth of cloud computing.
AI is proving exactly the opposite.
Every new data center incorporates tens of thousands of GPUs but also requires exabytes of storage to continually feed those accelerators with data.
It’s no coincidence that, besides NVIDIA and AMD, companies like Western Digital, Sandisk, SK Hynix, Micron, Samsung, and even emerging manufacturers like CXMT are experiencing one of the most dynamic periods of the last decade.
Artificial intelligence is not only redefining the accelerator market but is also reigniting the importance of the entire infrastructure chain that enables storing, moving, and managing unprecedented amounts of data.
Frequently Asked Questions
Why is Western Digital growing so much?
Primarily due to the increasing demand for storage in data centers, hyperscalers, and AI platforms.
Does Western Digital still manufacture SSDs?
After the corporate separation in 2025, the flash memory business was spun off as Sandisk. Western Digital now focuses on enterprise storage and hard drives.
What is the impact of the memory shortage?
The growing demand for HBM, DRAM, and AI storage has reduced the supply available for other markets and strengthened the negotiating power of memory and storage manufacturers.
What does the company expect for the next quarter?
Western Digital expects to generate around $4.1 billion, with a gross margin between 55% and 56% and earnings per share close to $4.
