Don't Forget About Western Digital Amid Sandisk Euphoria
Key Points
Hard disk drives are a foundational part of AI infrastructure, and Western Digital is a top provider.
The company posted strong revenue growth and meaningful sequential gains, with guidance suggesting the trend will continue.
The AI boom is intact as spending rises and tech giants begin to see returns on their investments.
- 10 stocks we like better than Western Digital ›
Sandisk (NASDAQ: SNDK) has been the hottest stock in the S&P 500, with an 820% year-to-date gain. That return, plus Micron Technology's (NASDAQ: MU) recently achieved $1 trillion market cap, makes it easy for investors to forget about Western Digital (NASDAQ: WDC), another memory stock that is benefiting from the AI build-out.
If you already have Sandisk and Micron shares, Western Digital may be a good addition to consider.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Western Digital is deeply integrated in the AI boom
Western Digital specializes in hard disk drives that help AI chips perform at their best. These devices let AI chips store vast amounts of data, which is more important given the high volume of data from AI training and inference.
The company's enterprise hard disk drives were enough to yield 45% year-over-year revenue growth in its fiscal 2026 third quarter. Western Digital also delivered 11% sequential revenue growth. High sequential growth is a common indicator of AI stocks that have more room to run. Sandisk and Micron both posted elevated sequential growth while guiding for additional sequential growth in future quarters. Western Digital did the same.
Fiscal 2026 fourth-quarter revenue is projected to be $3.65 billion, which represents 9.4% sequential growth. Western Digital's hard disk drives are a critical layer of AI infrastructure. Semiconductor chips need them, and as hyperscalers load up on more AI chips, they will have to buy more of Western Digital's hard disk drives.
The bullish thesis mainly boils down to how much you believe in AI
Western Digital has the right product at the right time. Its 333% year-to-date gain may feel pedestrian if you put it next to Sandisk, but that return has outperformed almost every stock in the entire market. Western Digital CEO Irving Tan offered a simple thesis for investors in the Q3 fiscal year 2026 press release.
"Virtually every AI workload, from training, inference, agentic AI to physical AI, creates data that is stored persistently and cost-efficiently on HDDs," Tan said.
Most forecasts suggest that the AI boom still has several years left. Grand View Research pegs a 30.6% compound annual growth rate (CAGR) through 2033, and there are still 809 planned data centers. Each of those data centers will need hard disk drives, and many data center builders will turn to Western Digital due to its reliability.
Western Digital finds itself at the center of these attractive tailwinds. Big tech is posting higher revenue growth rates thanks to AI, which will necessitate increased investments to avoid losing ground. For instance, Alphabet CEO Sundar Pichai told investors in a first-quarter press release that AI was "lighting up every part of the business." That's good news for a company that has established itself as a leading hard disk drive provider.
Should you buy stock in Western Digital right now?
Before you buy stock in Western Digital, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Western Digital wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $417,305!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,293,148!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 209% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of June 21, 2026.
Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Micron Technology, and Western Digital. The Motley Fool has a disclosure policy.
Recommended Articles
