Western Digital Falls 6% Into Earnings as Storage Stocks Sell Off
Western Digital shares fell about 6% on Thursday to $355.02, down roughly 24% over the past month, as storage stocks sold off ahead of the company's fiscal first-quarter report due after the close, with Toshiba's plan to double hard-drive capacity and a broader tech pullback weighing.
Western Digital (WDC) shares fell about 6% on Thursday to $355.02 as of 3:18 p.m. ET, and are down about 24% over the past month, as memory and storage stocks sold off ahead of the company's fiscal first-quarter report. Results are due after the close, with the call at 4:30 p.m. ET. Analysts expect adjusted earnings of about $4.11 a share on revenue of about $4.14 billion. The stock has been under pressure since an early-October report that Toshiba plans to double its hard disk drive (HDD) capacity, and Thursday's tech pullback added to the slide.
What is weighing on the stock
| Driver | What was reported | Source |
|---|---|---|
| Toshiba capacity | Toshiba plans to spend about ¥60 billion (roughly $400 million) to double HDD capacity by fiscal 2027, centered on its Philippines plants | Nikkei, via The Motley Fool and Investing.com |
| Tech selloff | Memory and storage stocks fell Thursday morning in a broader tech pullback tied to concerns over the sustainability of AI financing; Seagate was down more than 7% and the Roundhill DRAM ETF nearly 5% | Investopedia |
| Consumer demand | Slowing PC and smartphone demand and weaker consumer PC and NAND prices, while cloud and enterprise nearline drive demand stays strong | TradingKey |
| Rates and valuation | Rising U.S. Treasury yields pressuring high-multiple semiconductor and storage stocks; Micron and SanDisk also sold off | TradingKey |
Investopedia noted the stock has more than doubled since the start of 2026 despite the pullback, and Investing.com put its June peak at $799.87, which leaves the shares exposed when risk appetite turns. By our calculation, Thursday's $355.02 is about 56% below that peak.
The Toshiba report
WDC closed down 10.22% at $415.29 on Friday, Oct. 2, according to Yahoo Finance, after the Nikkei report. Seagate (STX) fell about 12.5% that day, Investing.com reported. The Motley Fool said Western Digital and Seagate each hold 40% or more of the HDD market, with Toshiba at about 17%, so doubling output could lift Toshiba toward 30%. The worry is that extra supply could force price cuts and squeeze the margins that have driven both stocks.
Not everyone saw a lasting threat. Citi's Asiya Merchant called the selloff overdone, noting that Toshiba relies on outside suppliers for media and heads, which could limit how much new capacity reaches the market. Wells Fargo's Joseph Quatrochi called the concern "misunderstood" but still cut his WDC price target to $450 from $730, keeping an Overweight rating, according to BigGo Finance. UBS's Timothy Arcuri lowered his target to $470 from $525 with a Neutral rating, citing uncertainty over HDD supply and pricing. Bernstein's Mark Newman called Seagate the "better trade" and flagged execution risk on Western Digital's next-generation technology.
Where the stock stands
| Date | WDC price | Note |
|---|---|---|
| June 2026 | $799.87 | Peak, per Investing.com |
| Oct. 2 | $415.29 | −10.22% on the Toshiba report |
| Oct. 19 | $330 | Touched its April low, per TradingKey |
| Oct. 21 | $378.51 | +3.89% on the day |
| Oct. 22, 3:18 p.m. ET | $355.02 | About −6.2% on the day, −23.6% over the past month |
By our calculation, the stock is about 14.5% below its Oct. 2 close and about 7.6% above Monday's $330 low. TradingKey called $330 a support level and $300, where the 200-day moving average sits, the next one to watch if results disappoint, and said strong results could bring $400 back into reach.
What the report needs to show
| Metric | Company guidance | Consensus | Year-ago quarter |
|---|---|---|---|
| Revenue | $4.1B ± $100M | $4.14B | $2.82B |
| Non-GAAP EPS | $4.00 ± $0.15 | $4.09–$4.11 | $1.78 |
| Non-GAAP gross margin | 55%–56% | — | — |
Consensus implies revenue growth of about 47% and EPS growth of about 130%, according to TradingKey. In its fiscal fourth-quarter release on Aug. 5, Western Digital reported revenue of $3.75 billion, up 44%, a non-GAAP gross margin of 54.4% and non-GAAP EPS of $3.56, which topped the $3.31 consensus. CEO Irving Tan said the company entered fiscal 2027 with "continued confidence in the durability of demand." TradingKey noted that WDC has beaten the EPS consensus in seven of its last eight quarters, and that the stock fell after the prior report because guidance was only slightly above expectations. Bank of America's estimate for the quarter is a 56.4% gross margin, according to TipRanks.
Sources: Western Digital's fiscal Q4 2026 earnings release (Aug. 5, SEC Exhibit 99.1) and its investor relations site for the Oct. 22 release and call schedule; Investopedia (Oct. 22), TradingKey (Oct. 19–22), The Motley Fool, Investing.com, Yahoo Finance and BigGo Finance (October). The Thursday price is a 3:18 p.m. ET quote and will differ from the close. This is informational, not a recommendation to buy or sell.
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