Western Digital Corporation (WDC) recently unveiled a six-stage AI Data Cycle Storage Framework to help clients strategize and develop advanced storage infrastructures. This is expected to boost efficiency and help clients fully capitalize on their AI investments.The company is focused on aligning its portfolio of enterprise-class SSDs and HDDs to support storage needs for each stage of the AI Data Cycle. As part of this, the company launched new products, including high-performance PCIe Gen5 SSD, 64TB SSD ...

MINNEAPOLIS, MN - JANUARY 03: A general view of the Seagate Technology company offices on January ... [+] 03, 2024 in Minneapolis, Minnesota. (Photo by AaronP/Bauer-Griffin/GC Images)GC ImagesThe stock price of Seagate (NASDAQ: STX) saw a 6% jump on Wednesday, June 5, after the company’s management stated that it will see better than anticipated margins in Q4 (Seagate’s fiscal ends in June). Seagate’s peer – Western Digital (NASDAQ: WDC) – also saw its stock rise 4%. Seagate expects its gross margin to be b ...

Core Viewpoint - Western Digital Corporation is positioned to benefit from the increasing storage needs driven by AI adoption across various sectors, including PC, mobile, and cloud markets, which will enhance demand for both HDD and Flash products [4][5][6]. Group 1: AI Impact and Market Trends - The adoption of AI is expected to significantly increase storage requirements, particularly for data generated by GenAI models, which will lead to longer data retention [5][6]. - The enterprise and cloud markets are showing signs of recovery, contributing to the demand for storage solutions, although not solely driven by AI [6]. Group 2: Pricing Environment - The pricing environment for Flash products has been favorable due to supply-demand dynamics, with expectations of continued favorable conditions in the coming quarters [8]. - The HDD side is also experiencing a favorable pricing environment, supported by a strong product portfolio [8]. Group 3: Capacity and Investment Strategy - The company is focused on profitability rather than expanding capital investments, having previously reduced manufacturing capacity in response to market downturns [10][11]. - Current manufacturing capacity aligns with mid-term demand expectations, and significant capital investments will only be considered when there is sustainable demand [10][11]. Group 4: Cost Reduction and Operational Efficiency - The company has achieved a fixed cost reduction of approximately 15% in HDD manufacturing compared to the end of fiscal year 2022, enhancing operating leverage [49]. - Operational expenses have been reduced by $100 million to $150 million per quarter, allowing for improved margins without compromising product investment [50]. Group 5: Spin-Off Plans - Progress is being made towards the planned spin-off into separate HDD and Flash entities, with a target timeline set for the end of the year [18]. - The spin-off aims to unlock shareholder value and create two focused public companies [52]. Group 6: Market Position and Future Outlook - The HDD industry is expected to see long-term exabyte growth in the range of 20% to 25%, with sequential improvements anticipated for the remainder of the calendar year [34]. - The company is optimistic about its product portfolio and pricing environment, positioning itself well for the cyclical recovery [52].

Summary of Western Digital Corporation Conference Call Company Overview - **Company**: Western Digital Corporation (NASDAQ: WDC) - **Event**: Bank of America 2024 Global Technology Conference - **Date**: June 4, 2024 Key Industry Insights - **AI Impact**: AI adoption is expected to increase storage needs across various sectors including PC, mobile, and cloud, benefiting both HDD and Flash segments [4][5][6] - **Pricing Environment**: The pricing environment for both Flash and HDD is favorable, driven by supply-demand dynamics, with expectations of continued favorable conditions in the coming quarters [7][8] - **Capacity Management**: The company has optimized its manufacturing capacity during the downturn, focusing on profitability rather than capital investments [10][11][49] Financial Performance and Projections - **Gross Margins**: Target gross margins are set at 31% to 34% for HDD and 35% to 37% for Flash, with current performance indicating a recovery towards these targets [20][22] - **Cost Reduction**: The company aims for mid-teen percentage cost reductions in Flash technology transitions, while HDD cost reductions are expected to be in low double-digit percentage points [15][16] - **Cash Generation**: Western Digital has returned to generating cash and is focused on strengthening its balance sheet ahead of the planned spin-off [24] Strategic Developments - **Spin-off Plans**: The company is making significant progress towards splitting into two independent entities focused on HDD and Flash, targeting completion by the end of the year [18][19] - **Enterprise SSD Growth**: Demand for enterprise SSDs is recovering, with new products aimed at AI workloads expected to launch in the second half of the year [25][26][27] - **Technology Transition**: The transition from BiCS5 to BiCS6 and BiCS8 is underway, with BiCS8 expected to be the next major node for product launches [29][30] Market Dynamics - **Exabyte Growth**: The HDD industry is expected to see long-term exabyte growth in the range of 20% to 25%, with sequential improvements anticipated for the remainder of the calendar year [34] - **SMR Adoption**: SMR-based shipments accounted for over 50% of high-capacity drives last quarter, with positive traction from key cloud customers [43][44] Operational Efficiency - **Capacity Reduction**: The company reduced its client manufacturing footprint by 40% and fixed costs by approximately 15% compared to fiscal year 2022, enhancing operating leverage [49][50] - **Cost Management**: Operating expenses have been reduced by $100 million to $150 million per quarter, allowing for continued investment in product development [50] Conclusion - **Cyclical Recovery**: Western Digital is positioned for a cyclical recovery with a strong product portfolio and favorable market conditions, while also preparing for the upcoming spin-off to unlock shareholder value [52]

Company Performance - Western Digital's stock closed at $73.94, reflecting a -1.39% change from the previous trading day, underperforming the S&P 500's daily gain of 0.15% [1] - Over the past month, Western Digital's shares gained 3.28%, lagging behind the Computer and Technology sector's gain of 5.13% but outperforming the S&P 500's gain of 3.2% [1] - The upcoming earnings report is expected to show an EPS of $1.02, which represents a 151.52% increase from the prior-year quarter, with revenue anticipated at $3.72 billion, up 39.37% from the prior-year quarter [1] Annual Estimates - For the annual period, the Zacks Consensus Estimates predict earnings of -$0.84 per share and revenue of $12.81 billion, indicating increases of +76.6% and +3.96% respectively from the last year [2] - Recent modifications to analyst estimates for Western Digital reflect near-term business trends, with positive revisions seen as a good sign for the company's outlook [2] Industry Ranking - Western Digital currently holds a Zacks Rank of 2 (Buy), with the Zacks Consensus EPS estimate remaining steady over the past month [3] - The Computer-Storage Devices industry is part of the Computer and Technology sector, holding a Zacks Industry Rank of 25, placing it in the top 10% of over 250 industries [3] - The Zacks Industry Rank assesses the strength of industry groups, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [3]

Western Digital Corporation (NASDAQ:WDC) TD Cowen 52nd Annual Technology, Media & Telecom Conference May 30, 2024 9:05 AM ET Company Participants Peter Andrew - VP, Financial Planning and Analyst and IR David Goeckeler - CEO Conference Call Participants Krish Sankar - TD Cowen Krish Sankar All right. Good morning, everybody. I'm Krish Sankar, the TD Cowen analyst covering Western Digital. We're very fortunate enough to have Dave Goeckeler, the CEO and also Peter Andrew, Head of IR for Western Digital. I'll ...

Core Viewpoint - Western Digital (WDC) has shown strong stock performance recently, with a +9.8% return over the past month, outperforming the S&P 500's +3.2% and the Computer Storage Devices industry’s +4.8% [1] Earnings Estimate Revisions - The current quarter's earnings estimate for Western Digital is $1.02 per share, reflecting a +151.5% change year-over-year [3] - The consensus earnings estimate for the current fiscal year is -$0.84, indicating a +76.6% change from the previous year [3] - For the next fiscal year, the consensus earnings estimate is $8.33, showing a significant increase of +1,092.4% compared to the prior year [3] Revenue Growth Potential - The consensus sales estimate for the current quarter is $3.72 billion, representing a year-over-year change of +39.4% [5] - For the current fiscal year, the sales estimate is $12.81 billion, indicating a +4% change, while the next fiscal year's estimate is $17.91 billion, reflecting a +39.8% change [5] Last Reported Results and Surprise History - In the last reported quarter, Western Digital achieved revenues of $3.46 billion, a +23.3% year-over-year increase [6] - The EPS for the same period was $0.63, compared to -$1.37 a year ago, with a revenue surprise of +3.87% and an EPS surprise of +200% [6] - The company has consistently beaten consensus EPS and revenue estimates over the last four quarters [6] Valuation - Western Digital is currently graded D in the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [9] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is fairly valued [7] Conclusion - The Zacks Rank 2 suggests that Western Digital may outperform the broader market in the near term, supported by strong earnings and revenue growth projections [10]

Western Digital Corporation (NASDAQ:WDC) Goldman Sachs Global Semiconductor Conference May 29, 2024 3:20 PM ET Company Participants David Goeckeler - CEO Wissam Jabre - CFO Conference Call Participants Toshiya Hari - Goldman Sachs Toshiya Hari All right. We'd like to get started. Welcome, everyone. My name is Toshiya Hari. I cover the U.S. semiconductor space for Goldman Sachs. Very excited to have the team from Western Digital with us for the session. We have David Goeckeler, CEO. We also have Wissam Jabre ...

Western Digital Corporation (NASDAQ:WDC) Goldman Sachs Global Semiconductor Conference May 29, 2024 3:20 PM ET Company Participants David Goeckeler - CEO Wissam Jabre - CFO Conference Call Participants Toshiya Hari - Goldman Sachs Toshiya Hari All right. We'd like to get started. Welcome, everyone. My name is Toshiya Hari. I cover the U.S. semiconductor space for Goldman Sachs. Very excited to have the team from Western Digital with us for the session. We have David Goeckeler, CEO. We also have Wissam Jabre ...

Western Digital Corporation (NASDAQ:WDC) JPMorgan’s 52nd Annual Technology, Media & Communications Conference May 20, 2024 8:00 AM ET Company Participants Wissam Jabre - CFO Peter Andrew - IR Conference Call Participants Harlan Sur - JPMorgan Harlan Sur Good morning, and welcome to the first day of J.P. Morgan's 52nd Annual Technology, Media & Communications Conference. My name is Harlan Sur. I'm the semiconductor and semiconductor capital equipment analyst for the firm. Very pleased to have Wissam Jabre, C ...