Western Digital Forecasts Up to 72% Revenue Growth for Fiscal Q2 Amid AI Storage Demand
Western Digital issues strong guidance, projecting 66-72% YoY revenue growth for fiscal Q2, adjusted EPS of $5.80, and a dividend hike.
US data storage company Western Digital Corp (NASDAQ: WDC) issued financial guidance on October 23, 2026, forecasting that revenue for its fiscal second quarter will increase by 66% to 72% year-on-year, reaching approximately $5.1 billion (plus or minus $100 million). This projection follows a strong first quarter, during which the company's sales rose 55% year-on-year to $4.38 billion.
Management noted that demand for data storage continues to strengthen as cloud service providers and large-scale data center operators expand their artificial intelligence infrastructure. Consequently, Western Digital expects its adjusted gross margin for the second quarter to reach 60% to 61%, with adjusted earnings per share forecast at $5.80 (plus or minus 20 cents).
In the first quarter (ended October 2), Western Digital's adjusted earnings per share surged 161% year-on-year to $4.64, while operating income increased 158% to $2.05 billion. Gross margin expanded to 57.8% from 43.5% a year earlier. Cash generated from operations more than doubled to $1.60 billion, and free cash flow rose to $1.38 billion from $599 million.
Reflecting improved profitability, Western Digital announced a 17% increase in its quarterly cash dividend to $0.175 per share, scheduled for payment on December 17. Chief Executive Officer Irving Tan stated that robust customer demand and disciplined execution supported these results as the company progresses through technology transitions to meet growing storage requirements.