WESTERN DIGITAL CORP

Storage/HDD maker enjoying a strong demand upcycle (AI/nearline) with high margins and returns; cyclicality and the reported growth artifact temper it.

Strengths

• Strong profitability and returns this cycle — operating margin 24.5% (88th), ROE 35.6% (86th), ROA 13.5% (85th)
• Solid free cash flow — FCF $1.28B (88th)
• Manageable leverage — D/E 0.47

Risks

• Reported growth is an artifact — revenue +315% / net income +263% reflect the SanDisk separation/normalization, not organic
• Storage cyclicality — margins swing widely with the HDD/memory cycle
• Thin liquidity — current ratio 1.08 (17th), quick ratio 0.84

Notable findings

• Fund exitedNotable fund(s) exited this quarter: VANGUARD GROUP INC
• Exec changeRecent 8-K item 5.02 8-K ↗
• Strong balance sheetStrong balance sheet — $2.1B cash & investments
• Insider sellingInsider selling — 143 open-market sale(s) by 7 insider(s) (cluster of 7 insiders, ~$49M, last 6mo) Form 4 ↗
• Notable holderHeld by 6 notable fund(s): FMR LLC, STATE STREET CORP, GOLDMAN SACHS GROUP INC +3 more (as of 2026-03-31)
• China exposuretrade restrictions, such as export controls, export bans, import restrictions, embargoes, sanctions, license and certification requirements (including encryption and other technology), trade wars, tar
• AccumulatingInstitutional holders rose 18→22 QoQ (2025-12-31→2026-03-31)