Western Digital Corporation (WDC) saw its stock soar 12.14% in pre-market trading on Friday, following the release of its fiscal first quarter 2026 financial results that significantly exceeded analyst expectations. The data storage giant reported robust earnings growth, increased its dividend, and provided an optimistic outlook, driving investor enthusiasm.
For Q1 2026, Western Digital reported earnings per share of $1.78, surpassing the analyst consensus estimate of $1.58 by 12.7%. This represents a substantial 137.3% increase from the $0.75 per share reported in the same period last year. The company's quarterly revenue reached $2.82 billion, beating analyst estimates of $2.73 billion by 3.4% and marking a remarkable 27.4% year-over-year increase.
CEO Irving Tan attributed the strong performance to the growing demand for data storage in the cloud, stating, "Western Digital continues to execute well in a strong demand environment driven by growth of data storage in the cloud." He also noted that the AI boom is accelerating data creation, positioning the company well to capitalize on new opportunities. Adding to the positive sentiment, Western Digital announced a 25% increase in its quarterly cash dividend to $0.125 per share, reflecting confidence in its business momentum and commitment to shareholder returns.
The company's outlook for the second quarter was equally impressive, with projected revenue between $2.8 billion and $3 billion, and adjusted earnings per share between $1.73 and $2.03, both exceeding analyst expectations. Western Digital's CFO Kris Sennesael emphasized that the outlook reflects continued revenue growth due to data center demand and improved profitability led by the adoption of its high-capacity drives.
The strong results and positive outlook underscore Western Digital's strategic positioning in the rapidly growing cloud storage and AI markets. As businesses continue to invest in data center capacity and AI development, Western Digital's data storage solutions are experiencing increased demand, particularly for its high-capacity hard disk drives used in cloud infrastructure.