Western Digital's 242nd-Ranked Trading Volume Hides Strong Earnings and $2 Billion Buyback as Cash Flow Surges on AI-Driven Demand

On August 29, 2025, Western Digital (WDC) traded with a volume of $0.40 billion, ranking 242nd in market activity. The stock closed 2.07% lower, reflecting mixed investor sentiment ahead of earnings updates.

Western Digital reported robust cash flow generation in fiscal 2025, driven by surging demand for high-capacity hard disk drives (HDDs) in cloud computing and generative AI applications. Revenue for the fiscal year rose 51% year-over-year to $9.52 billion, with the cloud segment accounting for 90% of total sales. Non-GAAP operating income hit $2.3 billion, while free cash flow reached $1.4 billion, supported by disciplined capital expenditures of $71 million. The company also reduced debt by $2.6 billion, bringing gross debt to $4.7 billion and net leverage within its 1x–1.5x target range.

Management announced a $2 billion share repurchase program, with $149 million allocated to repurchase 2.8 million shares in the fiscal fourth quarter. A quarterly dividend of $0.10 per share was initiated, distributing $36 million in the period. While executives cautioned that not every quarter will match the recent performance, they emphasized a sustainable free cash flow model, with future gains expected from a shift toward high-capacity drives and controlled capital spending.

Backtesting data indicates WDC shares have gained 14.9% in the past month, outperforming the Zacks Computer-Storage Devices industry’s 4.2% decline. The stock trades at a forward P/E of 12.43x, below the industry average of 18.15x. Analysts revised fiscal 2026 earnings estimates upward by 13.4%, projecting $6.50 per share. The company currently holds a Zacks Rank #1 (Strong Buy) rating.