Key Takeaways Seagate is accelerating HAMR drive shipments, topping 1.5M units in 2025.STX secured qualifications with all major U.S. cloud providers, with global approvals due by 2026.Seagate expects fiscal Q3 revenues of $2.9B ( /-$100M), up 34% at midpoint.In today’s digital era, data continues to grow at a staggering pace, driven by cloud computing, generative AI, video streaming and billions of connected devices. At the center of this explosion is the ongoing demand for high-capacity, cost-efficient st ...

Core Insights - Western Digital Corporation (WDC) is experiencing strong momentum due to cloud adoption and AI reshaping global storage needs, benefiting from increased demand for high-capacity drives [1][5] Group 1: Business Performance - In the fiscal fourth quarter, Western Digital shipped 190 exabytes of storage, a 32% increase year over year, driven by demand for nearline drives and high-capacity products [2][9] - The company reported a 30% year-over-year revenue surge in Q4, with Q1 guidance projecting non-GAAP revenues of $2.7 billion, reflecting a 22% year-over-year increase [5][9] - Shipments of 26TB CMR and 32TB UltraSMR drives more than doubled from the previous quarter, exceeding 1.7 million units in June [2][9] Group 2: Product Development - Western Digital is advancing its next-generation HAMR drives, which are entering the qualification phase, with a ramp-up targeted for the first half of 2027 [3] - The company’s next-gen ePMR drives are expected to complete qualification by early 2026, facilitating a smooth transition to HAMR technology [3] - The solid-state drive (SSD) market is expanding rapidly, driven by the demand for faster and more energy-efficient drives suitable for various applications [3] Group 3: Market Trends - The rise of generative and agentic AI is creating unprecedented demand for unstructured data storage, with AI agents generating data at an accelerated rate [4] - Cloud computing and AI-driven applications are significantly influencing the demand for high-capacity storage solutions [5] Group 4: Competitive Landscape - The disk drive industry remains highly competitive, with Western Digital facing competition from companies like Seagate, Pure Storage, Hitachi, Samsung, and Intel [6] - Customer concentration and a leveraged balance sheet are noted as concerns for the company [6] Group 5: Valuation and Estimates - Over the past year, Western Digital shares have increased by 67.1%, outperforming the Zacks Computer-Storage Devices industry's growth of 28.8% [12] - The forward price/earnings ratio for WDC is 17.76X, lower than the industry average of 22.06X [13] - The Zacks Consensus Estimate for WDC's earnings for fiscal 2026 has been revised up by 10.1% to $6.52 over the past 60 days [14]