Western Digital's margins are riding price increases that management sees lasting three to four more quarters. Price per terabyte rose 28% year on year while cost per terabyte falls less than 10%; December gross margin is guided to 60-61%. At about 10x fiscal 2028 consensus earnings, the stock prices in an early end to hikes despite scarce heads and media that WD mostly makes itself. Buy, $406. Long-term contracts cover less volume further out, leaving spot sales exposed if pricing turns. x.com  … Show more

Western Digital's hard drives capture AI-generated data, supporting stronger margins and guidance. Most data from models, agents and robots ends up on hard drives. Revenue rose 55% to $4.38B, gross margin hit 58.1%, and next-quarter revenue guidance rose to $5.0-5.2B versus $4.57B expected; EPS guidance midpoint is 21% above consensus. Before earnings, at ~15x earnings it looked priced as a cyclical, not an AI winner. Overweight, $613 target and 62% indicated upside in the pre-earnings report. … Show more

AI data and content creation could lift Seagate's and Western Digital's cross-cycle earnings even if supply catches up and pressures prices and margins. Western Digital reported hyperscaler demand signals through 2030/31, making 2013-2024 normalized earnings a poor baseline. Still not a huge fan of their stocks given their large premium to memory makers and Toshiba's production ramp. x.com  x.com 

AI and data centers now drive HDD demand, so Western Digital's long customer visibility suggests AI demand could last into 2030-31. CEO Irving Tan says the company has good visibility through 2030-31 across its seven top customers, with demand signals increasing over time. That adds to the case for durable demand, though the AI runway is an inference from the HDD outlook. x.com 

Seagate's gross margin jump to 57.8% from 52.7% shows pricing power in a supply-constrained hard-drive market. AI data needs storage, hyperscalers seek capacity, and HAMR packs more terabytes into existing factories; roughly 90% of big-cloud data sits on hard drives. Sales reached $4.2B and next-quarter guidance of $4.8B beats the Street's $4.53B. This cycle looks to be accelerating rather than peaking. Overweight, $1,050 target. x.com  x.com 

The valuation gap favors SK hynix and Samsung over Corning, Seagate and Western Digital. Companies trading at 20x are still called cheap while the memory makers trade at 2x; Corning is not cheap on a $4 run rate even with growth, and neither are Seagate or Western Digital. The gap should narrow as memory rises while HDD stalls. x.com  x.com 

Hard drives from Western Digital and Seagate are shouldering the bulk of the AI revolution's storage, and physical AI taking off would add even more demand. x.com 

SanDisk's data-center flash growth shows AI inference is becoming a larger storage customer. Data-center revenue reached $4.8bn, up 61% in a quarter and over 40% of sales; total revenue of $11bn and EPS of $49.51 beat expectations. Guidance of $12.4bn revenue and $56 EPS suggests feared supply normalization has not yet eroded pricing. Overweight, with a $2,700 target. x.com  x.com 

A supply response could compress Western Digital's pricing and margins, eroding its apparent cheapness. Its 2013-24 normalized earnings merit a look: even huge demand growth in other industries eventually drew supply and mediocre returns. A digestion/reset would hurt buy-and-hold investors, though the outcome is uncertain. Pre-AI economics were mediocre and unlikely to become amazing post-AI; TSMC's stronger pre-AI economics make its post-AI case better. x.com  x.com  x.com 

Rising memory contract prices strengthen the case for memory stocks still far below their highs. JPMorgan forecasts Q4 DRAM prices up 13% and NAND up 18%; Micron is 28% below its 52-week high, Seagate 44%, Sandisk 47% and Western Digital 55%. x.com