Western Digital (WDC) stock jumped late Thursday, after the data storage company reported a mixed fiscal first quarter. Earnings exceeded expectations while revenue came in slightly lower than what analysts expected but still represented a 49% year-over-year jump.
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Western Digital said that it earned an adjusted $1.78 per share on sales of $4.1 billion for the September-ended quarter. Analysts polled by FactSet projected the San Jose, Calif.-based company would post adjusted earnings of $1.71 per share on sales of $4.2 billion.
For the same period a year earlier, Western Digital posted an adjusted loss of $1.76 per share on sales of $3 billion.
On the stock market today, Western Digital stock is up more than 8% at 72.10 in after-hours action.
Cloud Boost For Western Digital
Western Digital is one of the largest makers of hard disk drives in the world and also among the market leaders in flash data storage products.
The company’s sales growth for its most recent quarter was helped by strong demand from cloud service providers. Sales from the company’s cloud division soared 153%, which the company attributed to increasing shipments to data center customers.
In June, Western Digital announced a “six-stage AI Data Cycle framework” focused on AI-related data storage.
“With the continued proliferation of the AI Data Cycle, our Flash and HDD product portfolios are well-positioned to capitalize on significant opportunities as adoption continues to grow,” Chief Executive David Goeckeler said in a news release.
For the current quarter, Western Digital guided for sales of $4.3 billion at the midpoint of its range. Prior to the company posting its results, analysts were projecting $4.3 billion in sales for the December-ending quarter, according to FactSet.
Western Digital Stock: Technical Ratings
In October 2023, the company announced plans to spin off its flash and hard-drive businesses. In a news release this spring, the firm said the plans are on track to be completed by the second half of 2024.
The company’s shares have gained 58.6% over the past 12 months, compared to a 38% gain for the S&P 500. Western Digital sales are bouncing back from a hard drive industry slowdown that sank the company’s earnings starting late in 2022.
Prior to earnings, Western Digital stock fell a fraction to 66.32 in regular trading Thursday.
Coming into the report, Western Digital stock had an IBD Composite Rating of 65 out a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Western Digital’s IBD Relative Strength Rating was 63 out of 99. The RS Rating means that Western Digital has outperformed 63% of all stocks in IBD’s database over the past year. IBD typically recommends focusing on stocks with an RS rating of 80 or higher.
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