WD rebranding bet pays off with massive $3 billion AI surge

Western Digital (WD) is transforming itself into an AI infrastructure kingpin, moving beyond its accepted markets to seizure its stock of spending frenzy.

The company, which is ditching its bequest nameplate and rebranding arsenic WD, precocious announced its second-quarter fiscal twelvemonth 2026 earnings, sparking bullish sentiment from analysts and boosting capitalist assurance this week. WD besides reinforced its optimism connected accelerating hard disk thrust (HDD) request from AI-heavy information centers.

In its net report, WD reported $3 cardinal successful revenue, up 25% twelvemonth implicit year. That was much than the Wall Streetconsensus of $2.7bn, and importantly amended maturation than a bequest hard thrust shaper would typically expect.

The Non-GAAP diluted EPS came successful astatine $2.13, portion the GAAP diluted EPS was $4.73.

In presumption of currency flow, WD reported $745 million successful operating currency travel and $653 cardinal successful escaped currency flow, and noted that it returned much than 100% of escaped currency travel to shareholders done banal repurchases and dividends.

The institution reported delivering 215 exabytes to its customers, up 22% year-over-year, including 3.5 cardinal drives oregon 103 exabytes of WD’s latest-generation ePMR, which offers capacities up to 32 terabytes.

The bulk of their gross came from Cloud, astatine $2.7 billion, oregon 89% of full revenue.

• Revenue astatine $3 billion, up 25% twelvemonth implicit year.

• Dividend approved astatine $0.125 per share, payable connected March 18 to shareholders of grounds arsenic of March 5.

• Non-GAAP EPS of $2.13, and GAAP diluted EPS was $4.73.

• $48 cardinal spent successful dividend payments, $615 cardinal to repurchase 3.8 cardinal shares.

• The HDD shaper expects gross to turn to $3.2 cardinal successful Q3 2026, underscoring 40% year-over-year growth.

• Gross borderline is expected to beryllium betwixt 47% and 48%, up from 46.1% reported successful Q2, driven by a displacement towards higher-capacity drives and choky outgo power astatine manufacturing sites.

• Diluted EPS expected to beryllium $2.30, plus/minus $0.15.

On Feb 1, CEO Irving Tan successful a blog station elaborated connected the company’s determination to go a institution that provides enactment to AI infrastrucutre, on with the rebranding to WD. With increasing request for information storage, HDDs person go cost-effective solutions that besides connection scalability and reliability.

This determination boosted capitalist confidence, adding to its post-earnings banal gains. WD continued to execute better, up 7.9% connected Monday arsenic it rang the doorbell connected Nasdaq to people its debut arsenic WD, underscoring the sanction alteration from Western Digital Corporation and the caller logo.