Western Digital Sees Resurgence as Demand for Data Storage Surges

Western Digital Corporation (WDC) is emerging as a key beneficiary of the exponential growth in data creation, with its enterprise and consumer storage divisions posting double-digit revenue increases in Q4 2025. The company reported $6.1 billion in revenue, surpassing analyst expectations by 7%, while non-GAAP operating margins expanded to 16.3%, up from 11.8% in the same period the previous year. This performance reflects improved pricing power and cost discipline following the industry-wide inventory correction in 2024. The resurgence is anchored in strong demand for high-capacity hard disk drives (HDDs) and solid-state drives (SSDs), particularly in data centers. WDC’s enterprise SSD revenue rose 29% year-over-year, with sales to major cloud providers including Amazon Web Services and Microsoft Azure accounting for over 40% of total enterprise revenue. The company also captured 24% of the global HDD market share in Q4 2025, marking a 3-percentage-point increase from the prior year and the highest level since 2021. WDC has also made significant progress in transitioning its product portfolio toward higher-margin offerings. The company now generates 58% of its total revenue from SSDs and hybrid storage solutions, up from 42% in 2023. Additionally, its new 22TB helium-filled HDDs, launched in late 2024, are being adopted by hyperscalers to reduce power consumption and increase data density, contributing to a 15% improvement in cost per terabyte. The stock has responded favorably, with WDC shares rising 28% in the first two months of 2025, outperforming the S&P 500 by over 12 percentage points. Analysts have upgraded the stock to 'Buy' across multiple firms, citing a sustainable demand tailwind and a capital allocation strategy focused on R&D and debt reduction. The company’s $1.8 billion share buyback program, initiated in Q1 2025, further underscores confidence in its long-term cash flow generation.