Western Digital Warns HDD Price Growth Will Eventually Slow — But AI, Inference and Robotics Are Keeping Demand Strong

Western Digital Corp. (NASDAQ:WDC) expects price growth for its hard drives to cool eventually, but sees demand for storage staying strong, with artificial intelligence, inference and robotics driving it.

Price Growth Set to Cool, Eventually

Western Digital’s Chief Financial Officer, Kris Sennesael, cautioned that price growth will ease, telling analysts on the company’s first-quarter earnings call on Thursday that, “I would assume eventually that is going to slow down a little bit.”

He still sees “further room” for price per terabyte growth over the next three to four quarters, as long-term agreements expire and are repriced and drives sold outside contracts command strong prices.

Average selling price per terabyte rose 28% from a year earlier in the quarter.

AI, Inference and Robotics Keep Demand Tight

CEO Irving Tan said there was “good visibility up to 2030, 2031” across the company’s top seven customers, with the demand signal “actually increasing” quarter after quarter.

His four growth drivers are cloud, model training, inference and agentic AI, and physical AI, including robotics, which he called “becoming a key area.”

Reports that Toshiba plans to nearly double HDD production capacity by fiscal 2027, compared with fiscal 2025 on a storage-capacity basis, have fueled concerns about future supply and pricing.

Pressed on rival capacity additions, Tan told analysts he sees no change at a high level in the industry’s “long-term fundamentals” and that the company is “committed to not investing in any incremental unit capacity.”

Shares of Western Digital and rival Seagate Technology Holdings Plc (NASDAQ:STX) have been under pressure this month as investors weigh valuations, future supply growth and the financing burden behind the AI buildout.

Q1 Beats Estimates, Guides Higher

Western Digital posted first-quarter earnings of $4.64 per share, topping the Wall Street estimate of $4.06, according to Benzinga Pro data. Revenue came in at $4.38 billion, above the $4.14 billion analysts expected.

For the second quarter, the company expects adjusted EPS of $5.60-$6.00, well above the $4.74 analyst estimate, and revenue of $5 billion to $5.2 billion, versus the $4.52 billion estimate.

Price Action: Western Digital shares closed 6.43% lower on Thursday at $354.19 and fell 6.54% to $331.01 in extended trading.

Over the past month, the stock is down 23.76% but is up 105.6% so far this year.

Benzinga Edge rankings indicate Western Digital’s stock has a Momentum score in the 96th percentile and a growth score in the 99th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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