Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Western Digital (WDC), and suggests that while the average brokerage recommendation indicates a buy, investors should be cautious and validate this with other analysis tools like the Zacks Rank [1][4][12]. Group 1: Brokerage Recommendations - Western Digital has an average brokerage recommendation (ABR) of 1.48, which is between Strong Buy and Buy, based on recommendations from 21 brokerage firms [2]. - Out of the 21 recommendations, 16 are Strong Buy, accounting for 76.2% of all recommendations [2]. - Despite the positive ABR, studies indicate that brokerage recommendations often do not effectively guide investors towards stocks with the highest potential for price appreciation [4][9]. Group 2: Analyst Bias and Tools - Brokerage analysts tend to exhibit a strong positive bias due to their firms' vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [5][9]. - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of a stock's near-term price performance compared to the ABR [7][10]. - The Zacks Rank is timely and reflects the latest earnings estimates, while the ABR may not always be up-to-date [11]. Group 3: Current Earnings Estimates for WDC - The Zacks Consensus Estimate for Western Digital remains unchanged at $7.32 for the current year, indicating steady analyst views on the company's earnings prospects [12]. - Due to the unchanged consensus estimate and other factors, Western Digital currently holds a Zacks Rank of 3 (Hold), suggesting caution despite the Buy-equivalent ABR [13].

Group 1 - Investors have historically viewed chip stocks as highly cyclical, leading to lower valuation multiples compared to the broader market [1] - The negative perception of chip stocks has continued into 2024, despite evolving industry dynamics [1] - Gary Alexander, with extensive experience in technology and startups, provides insights into current industry themes [1]

Industry Leadership - Western Digital CEO David Goeckeler has been elected Chair of the SIA Board of Directors for 2025 [1] - SIA represents 99% of the US semiconductor industry by revenue and nearly two-thirds of non-US chip firms [1][3] Executive Profile - David Goeckeler has over four decades of experience in technology and semiconductor industries [1] - He has led Western Digital's transformation as a leading data storage producer [1] - Previously served as Executive Vice President and General Manager of Cisco's Networking and Security Business [1] - Recently appointed Chairman of the US Chamber's US-Japan Business Council [1] Industry Impact - Semiconductor innovation is described as the transformative backbone of modern technology, from smartphones to AI [2] - Effective government policies are crucial for accelerating innovation and expansion in the semiconductor sector [2] Association Overview - SIA is the voice of the semiconductor industry, a top US export industry and key driver of economic strength, national security, and global competitiveness [3] - SIA works with Congress, the Administration, and global stakeholders to encourage policies that fuel innovation and drive international competition [3]

Investment Rating - The report provides a positive outlook for Western Digital Corporation (WDC), indicating strong performance and growth potential, particularly driven by AI demand and innovative product offerings [3][7][32]. Core Insights - Western Digital achieved Non-GAAP revenue of $4.095 billion in FY25Q1, representing a year-over-year increase of 49% and a quarter-over-quarter increase of 9%. The Non-GAAP gross margin was 38.5%, up 34.4 percentage points year-over-year [3][7][9]. - The company is focusing on sustainable and reliable operations, capital investments, and leveraging its diverse product portfolio to target attractive end markets, particularly in flash storage and HDDs [3][7][26]. - The eSSD segment is identified as a key growth driver, with significant advancements in UltraSMR technology enhancing HDD capacity and reliability [3][7][27]. Summary by Sections Overall Performance - In FY25Q1, Western Digital reported Non-GAAP revenue of $4.095 billion, with a Non-GAAP gross margin of 38.5% and a Non-GAAP net profit of $493 million, compared to a loss of $685 million in the same period last year [3][7][9]. Inventory - The inventory turnover days decreased to 121 days, with inventory value rising to $3.384 billion, reflecting a 1.26% increase quarter-over-quarter [10][37]. Revenue by End Market - Cloud revenue reached $2.208 billion, up 17% quarter-over-quarter and 153% year-over-year, accounting for 54% of total revenue [11][15]. - Client revenue was $1.209 billion, flat quarter-over-quarter and up 5% year-over-year, representing 29% of total revenue [12][15]. - Consumer revenue was $678 million, flat quarter-over-quarter and down 7% year-over-year, making up 17% of total revenue [14][15]. Revenue by Product - Flash products generated approximately $1.884 billion in revenue, up 6.98% quarter-over-quarter and 21.08% year-over-year, accounting for 46% of total revenue [16][19]. - HDD products generated approximately $2.211 billion in revenue, up 10.38% quarter-over-quarter and 85.18% year-over-year, representing 54% of total revenue [19][21]. Business Progress - The company has made significant progress in the flash segment, with strong demand for enterprise SSD applications driven by the recovery in the data center market [22][27]. - In the HDD segment, record revenue was achieved, supported by product portfolio advantages and improved market conditions [23][27]. FY25Q2 Guidance - For FY25Q2, Western Digital expects revenue between $4.2 billion and $4.4 billion, with a Non-GAAP gross margin of 37%-39% and Non-GAAP EPS of $1.75 to $2.05 [24][38].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 27, 2024 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-8703 WESTERN DIGITAL CORPORATION (Exact Name of Registrant as Specified in Its Charter) Delaware 33-0956711 (State or other j ...

Western Digital (WDC) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock. Over the past month, shares of this maker of hard drives for businesses and personal computers have returned +2.3%, compared to the Zacks S&P 500 composite's +1.8% change. During this period, the Zacks ComputerStorage Devices industry, which Western Digital falls in, has gained 6.5%. The key question now is: ...

Shares of Western Digital Corp WDC were spiking in early trading on Friday, after the company reported upbeat fiscal first-quarter earnings. The company reported its results amid an exciting earnings season. Here are some key analyst takeaways. Cantor Fitzgerald analyst C.J. Muse maintained an Overweight rating, while lifting the price target from $80 to $95. Benchmark analyst Mark Miller reiterated a Buy rating and price target of $92. RBC Capital Markets analyst Matt Bryson reaffirmed an Outperform rating ...

Western Digital Corporation (WDC) reported first-quarter fiscal 2025 non-GAAP earnings of $1.78 per share, surpassing the Zacks Consensus Estimate by 2.3%. The company incurred a loss of $1.76 per share in the prior-year quarter.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Revenues of $4.1 billion missed the Zacks Consensus Estimate by 0.4%. However, the top line climbed 49% year over year owing to strong demand trends across Cloud end markets. On a sequential basis, revenues inc ...

Financial Data and Key Metrics Changes - Western Digital reported total revenue of $4.1 billion, representing a 9% sequential increase and a 49% year-over-year increase [13] - Non-GAAP gross margin was 38.5%, up 220 basis points sequentially, and non-GAAP earnings per share were $1.78 [13][15] - Operating income increased by 33% sequentially to $884 million, with an operating margin of 21.6%, the highest in five years [16] Business Line Data and Key Metrics Changes - Flash revenue reached $1.9 billion, up 7% sequentially and 21% year-over-year, driven by strong demand for enterprise SSD products [14] - HDD revenue was $2.2 billion, up 10% sequentially and 85% year-over-year, with nearline bit shipments at a record level of 141 exabytes [14][15] - The gross margin for Flash was 38.9%, up 240 basis points sequentially, while HDD gross margin was 38.1%, up 200 basis points sequentially [15][16] Market Data and Key Metrics Changes - Cloud represented 54% of total revenue at $2.2 billion, up 17% sequentially and more than doubling year-over-year [13] - Client segment represented 29% of total revenue at $1.2 billion, flat sequentially and up 5% year-over-year [13] - Consumer segment accounted for 17% of revenue at $0.7 billion, flat sequentially and down 7% year-over-year [13] Company Strategy and Development Direction - The company is on track with the separation of its Flash and HDD businesses, having completed the soft-spin phase [6][7] - The focus remains on enhancing product offerings, particularly in enterprise SSDs, to capitalize on the AI Data Cycle and growing storage needs [5][21] - The company anticipates continued growth in both Flash and HDD segments, with a strong emphasis on operational excellence and maintaining a balanced supply-demand dynamic [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the product roadmap and the significant opportunities presented by the AI Data Cycle [21] - The company expects a recovery in consumer and client end markets as it moves through calendar year 2025 [9] - There is a positive outlook for enterprise SSDs, with expectations for the mix to comprise over 15% of overall portfolio bit shipments in fiscal year 2025 [9][24] Other Important Information - The company completed the sale of 80% of its equity interest in SanDisk Semiconductor Shanghai to JCET, forming a joint venture [18] - Cash capital expenditures for the fiscal first quarter were $48 million, with total liquidity of $3.9 billion [17] Q&A Session Summary Question: Can you speak to the qualifications seen with enterprise SSDs, particularly with NVIDIA's GB200? - Management noted strong confidence in the enterprise SSD portfolio, with qualifications doubling in the last quarter and strong demand expected [23][24] Question: How is pricing negotiation evolving in the HDD industry? - Management indicated improved visibility into customer demand and a better supply-demand balance, which supports pricing negotiations [26] Question: What is the plan for separating the companies? - The company is executing a soft-spin phase and will report one set of numbers for the December quarter, with plans to file the Form-10 during the March quarter [29][30] Question: How much room is there for expanding HDD capacity? - Management stated that they have sized their infrastructure to meet market demand and are focused on driving profitability without expanding the manufacturing capacity footprint [34][35] Question: What is the outlook for Flash ASPs given the mixed market conditions? - Management expects blended pricing to be flat with some cost headwinds, while enterprise SSDs remain strong [46][47] Question: How does the company ensure that HDD shipments are not piling up as inventory? - Management expressed confidence that there is no excessive inventory being built and emphasized close relationships with customers to gauge future demand [50] Question: What are the CapEx expectations for HDD and Flash for the rest of the year? - Management indicated that gross CapEx is expected to remain in line with the average over the last few quarters [51]

Western Digital (WDC) reported $4.1 billion in revenue for the quarter ended September 2024, representing a year-over-year increase of 48.9%. EPS of $1.78 for the same period compares to -$1.76 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $4.11 billion, representing a surprise of -0.39%. The company delivered an EPS surprise of +2.30%, with the consensus EPS estimate being $1.74.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wa ...