Western Digital Surges 10.16% on $1.86 Billion Volume Ranks 56th in Liquidity as Cloud and AI Demand Boost Earnings and Buybacks

Western Digital (WDC) surged 10.16% on July 31, 2025, with a trading volume of $1.86 billion, up 86.8% from the prior day, ranking 56th in market liquidity. The rally followed the company’s Q4 fiscal 2025 earnings report, which exceeded expectations with $2.61 billion in revenue—a 30% year-over-year increase—driven by surging demand for high-capacity storage in cloud computing and generative AI applications. Earnings per share reached $1.66, surpassing analyst forecasts, while the Cloud segment’s revenue climbed 36% to $2.6 billion.

Management attributed the growth to a shift toward higher-capacity drives and improved cost control, which boosted non-GAAP gross margins to 41.3%, up 610 basis points year-over-year. The company also announced a $2 billion share repurchase program and a new quarterly dividend, signaling confidence in its financial position. Free cash flow for the quarter reached $675 million, up 139% year-over-year, supporting the buyback initiative. Analysts raised price targets following the results, reflecting renewed optimism about the stock’s trajectory.

Looking ahead, Western Digital projected Q1 2026 non-GAAP revenues of $2.7 billion, a 22% year-over-year increase, with gross margins expected to remain between 41-42%. The stock has gained 26.8% year-to-date, reaching a 52-week high of $78.47. However, its volatility—marked by 20 moves of over 5% in the past year—suggests the market views the recent gains as significant but not transformative for long-term valuation.

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