AI-driven data-center demand lifted the storage maker’s outlook and quarterly results, but investors focused on weaker consumer and PC hard drive markets as memory prices rise.
Western Digital projected first-quarter revenue and adjusted profit slightly above Wall Street expectations, helped by continued demand from AI data centers for its hard disk drives. The company said it expects revenue of $4.1 billion, plus or minus $100 million, versus analysts’ average estimate of $4.04 billion compiled by LSEG, and adjusted earnings of $4 per share, plus or minus 15 cents, above the $3.81 estimate. Even so, the stock fell more than 9% in extended trading, suggesting investors were looking for a stronger outlook after shares had already tripled this year on hopes of sustained AI-led growth. The company also reported fourth-quarter revenue of $3.75 billion, up 44% from a year earlier and above the $3.69 billion estimate, while adjusted profit of $3.56 per share topped the expected $3.30. The mixed market reaction reflected a split across end markets: strong data-center demand is supporting the core business, but higher memory prices are lengthening consumer electronics replacement cycles and weighing on personal computer and consumer hard drive demand.