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Western Digital shares drop 12% after beating earnings expectations
The company reported 44% year-over-year revenue growth and margin expansion, but the stock still fell because expectations were already elevated.
Western Digital Corp. shares fell 12% on Thursday even after the company beat earnings, revenue, and guidance estimates, underscoring how sensitive the market has become after a strong run in the stock.
According to MarketBeat Ratings, Western Digital had tumbled about 35% from its June all-time high as investors questioned whether the AI storage demand story had been overstated. The quarter instead delivered strength across performance metrics, with revenue up 44% year-over-year and earnings comfortably ahead of forecasts.
The report highlighted expanding gross and operating margins, which the outlet noted reflect tight supply and firm pricing in the storage market during the AI boom. Cloud customers accounted for the overwhelming majority of revenue, and the company generated strong cash flow.
MarketBeat Ratings said the sell-off appeared driven primarily by expectations rather than results, pointing out that the stock was up more than 175% year-to-date going into the report. In that context, meeting or even beating forecasts was not enough to lift shares higher.