By Kit Norton

Western Digital late Thursday surpassed Wall Street expectations with its fiscal third-quarter earnings results while also issuing better-than-expected quarterly guidance as the artificial intelligence craze continues to boost data-storage demand.

The hard-drive maker reported third-quarter adjusted earnings of $2.72 a share, up from $1.36 a share last year and beating the Wall Street consensus of $2.39 a share. Revenue grew 45% to $3.34 billion, above the analyst consensus call for $3.25 billion.

The results also topped Western Digital's previous guidance from late January for earnings between $2.15 a share and $2.45 a share with sales ranging from $3.1 billion to $3.3 billion.

For the fiscal fourth quarter, Western Digital expects revenue to grow between 36% and 44% from the year before to around $3.65 billion with a profit midpoint of $3.25 a share. Wall Street forecasts fourth-quarter profit of $2.75 a share on sales of $3.46 billion, according to FactSet.

The company also expects fourth-quarter gross margin between 51% and 52%, up sequentially from 50.5% in the third quarter.

On the strength of the third-quarter, Western Digital announced a 20% increase to its quarterly cash dividend to 15 cents a share.

"The demand drivers are clear: Virtually every AI workload, from training, inference, agentic AI to physical AI, creates data that is stored persistently and cost-efficiently on HDDs," CEO Irving Tan said in the earnings release.

However, investors appear to have been looking for more from the earnings and guidance. Western Digital stock dropped 6% in after-hours trade after ending Thursday's regular trading up 5.3% to $434.52 as big tech companies such as Meta Platforms raised their AI capital expenditure forecasts. Over the past 12 months, Western Digital shares have soared 891%.

Memory and data storage stocks have been on a tear this year as the AI boom has triggered a surge in demand. Western Digital shares have soared 152% through Thursday's close. Seagate Technology stock is up 145% so far this year while Sandisk shares have climbed 362%. Micron Technology stock has advanced 81%.

However, the artificial-intelligence investment boom is also putting pressure on the supply of hard drives, and the manufacturing capacity of Western Digital and competitors like fellow hard-drive maker Seagate Technology.

Seagate on Tuesday bested Wall Street expectations with its third-quarter earnings and revenue results and issued fourth-quarter guidance, the initial signal the AI boom is still driving up demand for data storage.

Memory stocks tumbled earlier this week after The Wall Street Journal reported that ChatGPT developer OpenAI had missed key growth targets, triggering a selloff in stocks linked to AI computing. Stocks bounced back following Seagate's financial report.

Write to Kit Norton at kit.norton@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 30, 2026 16:30 ET (20:30 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.