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Western Digital’s Hyperscale Lock-In Looks Real—How Durable Is Demand Through 2028?

Western Digital Corporation’s second-quarter fiscal 2026 results present a complex landscape of achievements and challenges as the company addresses the rapidly evolving demands of AI and cloud computing. With AI and cloud computing serving as a major drivers of growth, the company continues to focus on developing higher-density storage solutions to meet the needs of its hyperscale customers. The company’s commitment to increasing areal density through advancements in technologies such as Heat-Assisted Magnetic Recording (HAMR) and energy-assisted Perpendicular Magnetic Recording (ePMR), as well as the upshift to UltraSMR technology, highlights its strategy for staying competitive in this landscape. The quarter saw Western Digital achieve significant revenue growth, reporting $3 billion, a 25% increase year-over-year, driven primarily by robust demand for nearline drives. Earnings per share (EPS) reached $2.13, surpassing expectations.