Western Digital Corp. shares traded lower Friday as storage and semiconductor stocks faced broad selling after AI developer DeepSeek released its V4.1 Flash model. The model reportedly needs one-quarter of the High Bandwidth Memory capacity and one-eighth of the SSD storage used by previous iterations, raising concerns that similar software efficiencies could reduce hardware intensity across large language model deployments. Western Digital’s focus on mass-capacity hard disk drives after separating its flash business into SanDisk provides some insulation from weaker flash-storage sentiment. TrendForce and IT Part Supply said hyperscale cloud providers continue using the company’s HDDs for generative-AI data lakes because of a 6-to-10x cost-per-terabyte advantage over enterprise SSDs in cold and warm storage. Its 40TB UltraSMR ePMR drives are in volume customer qualifications, while extended nearline-storage lead times indicate continued demand for core HDD technology. The shares were down 2.88% at $447.66, according to Benzinga Pro, despite strong fourth-quarter fiscal 2026 results and upbeat guidance.