2 Computer Storage Device Stocks to Buy on Solid Earnings & Guidance

Industry Overview - The computer storage devices industry is expected to benefit from growth in cloud computing, IoT, auto, connected devices, virtual reality, and AI, leading to increased demand for robust data storage solutions [2] - The Zacks-defined Computer – Storage Devices industry ranks in the top 10% of the Zacks Industry Rank, with a remarkable 133.4% return over the past year and a 145.8% year-to-date return, indicating strong market performance [3] Company Analysis: Western Digital Corp. (WDC) - Western Digital reported Q2 fiscal 2026 non-GAAP earnings of $2.13 per share, exceeding the Zacks Consensus Estimate of $1.95, with a 78% year-over-year increase in earnings [7] - Quarterly revenues reached $3.02 billion, surpassing estimates by 2.24%, although down from $4.29 billion year-over-year [7] - Cloud revenues, which constitute 89% of total revenues, increased by 28% year-over-year, driven by demand for higher-capacity nearline products [8] - WDC's strong performance is attributed to robust cloud and AI-driven data center demand, with a total of 215 exabytes shipped, marking a 22% year-over-year increase [12] - The company anticipates continued momentum in Q3, projecting non-GAAP revenues of $3.2 billion, a 40% year-over-year increase, and non-GAAP EPS of $2.30 [15] Company Analysis: Seagate Technology Holdings plc (STX) - Seagate Technology reported Q2 fiscal 2026 adjusted EPS of $3.11, surpassing the Zacks Consensus Estimate of $2.83 and up from $2.03 year-over-year [19] - Quarterly revenues were $2.83 billion, exceeding estimates by 2.7%, compared to $2.33 billion in the previous year [19] - Revenues from the Data Center segment, which accounts for 79% of total revenues, rose by 28% year-over-year, driven by strong demand from global cloud customers [20] - Seagate shipped 190 exabytes of HDD storage, a 26% year-over-year increase, with 87% of shipments going to the data center market [21] - The company expects strong demand to continue, projecting Q3 revenues of $2.9 billion, a 34% year-over-year improvement, and non-GAAP EPS of $3.40 [28]