Western Digital posted solid Q2 fiscal 2026 results, with CEO Irving Tan citing strong demand for high-capacity HDDs driven by the AI data economy. The company delivered revenue growth and gross margin expansion, while returning over 100% of free cash flow to shareholders.

The storage giant’s performance reflects broader industry trends, as data centers ramp up infrastructure spending to support AI workloads. Western Digital’s ability to scale production of reliable, high-capacity drives has bolstered customer confidence amid ongoing supply chain and demand pressures.

Looking ahead, CFO Kris Sennesael projected Q3 revenue of $3.2 billion, with non-GAAP gross margins at 47.5% and EPS of $2.30. The company also declared a $0.125 per share dividend, payable in March. Investors will watch for sustained momentum in enterprise storage demand.

Analysts expect continued strength in data center orders to drive HDD pricing and volume increases through 2026, especially from cloud providers expanding AI capabilities.