Strong Earnings Fail to Lift Stock: Western Digital Plunges 10% After Hours

According to Barron’s, Western Digital (WDC-US) announced its latest quarterly earnings on Wednesday (the 5th), surpassing market expectations. However, the company's financial outlook failed to meet the market's high hopes, causing its stock price to sharply decline in after-hours trading. At the time of writing, shares were down more than 10%.

This post-market sell-off underscores how the AI boom has significantly raised market expectations for related supply chain companies.

Prior to the earnings release, Western Digital’s stock had already surged 201% year-to-date.

Although the financial report indicated continued growth in data storage demand from the AI supply chain, investors reacted negatively to the company’s relatively conservative financial forecast, reflecting ongoing market concerns about a potential future slowdown in AI demand.

Western Digital’s adjusted earnings per share (EPS) for the fourth quarter of fiscal year 2026 came in at $3.56, exceeding the $3.31 average estimate compiled by FactSet analysts. Revenue for the quarter reached $3.75 billion, up 42% year-over-year and above Wall Street’s forecast of $3.7 billion.

However, the company’s outlook for the current quarter was only moderately positive, failing to deliver significant surprises.

Western Digital expects revenue for the current quarter (first quarter) to reach $4.1 billion, plus or minus $100 million. Adjusted EPS is projected between $3.85 and $4.15. Analysts had previously estimated revenue at approximately $4.06 billion and adjusted EPS at $3.84.

Moreover, the degree by which Western Digital’s financial forecast exceeded market expectations was less robust than the outlook released last week by competitor Seagate Technology (STX-US) following its own earnings announcement.