Western Digital shares tumble after Toshiba announces AI‑driven hard‑drive capacity boost
Western Digital (WDC) stock dropped sharply in early October 2026 after Toshiba disclosed plans to almost double its hard‑drive output for AI data‑center use by 2027. The news raised concerns that added supply could pressure prices and hurt Western Digital’s market share. Despite the sell‑off, Western Digital reported strong fourth‑quarter 2026 results with 44% sales growth and doubled earnings per share. Analysts kept buy ratings, citing continued AI‑driven demand.
Why it matters
The share decline reflects investor worries that Toshiba’s capacity expansion could erode pricing power for Western Digital’s high‑capacity drives, potentially affecting future revenue. The company’s strong recent earnings and sold‑out inventory through year‑end suggest short‑term resilience, but price pressure could impact margins if supply outpaces demand.
Key facts
- 1Western Digital closed at $415.29 on October 2, 2026, down $47.27 or about 10.22%. fxleaders.com
- 2Toshiba plans to spend about ¥60 billion (approximately $380‑$400 million) to expand its Philippines factory and nearly double yearly hard‑drive production for AI data centers by 2027. fxleaders.com
- 3Toshiba currently holds a little over 10% of the hard‑drive market and aims to increase its share to around 30% over time. fxleaders.com
- 4Western Digital’s Q4 2026 sales rose 44% year‑over‑year to $3.75 billion, with adjusted EPS of $3.56. fxleaders.com
- 5Full‑year 2026 sales reached $12.9 billion, up 36%, and free cash flow was about $3.5 billion. fxleaders.com
- 6Western Digital expects FY2027 Q1 sales of about $4.1 billion, adjusted gross margins of 55%‑56%, and adjusted EPS near $4.00. fxleaders.com
Open questions
- Conflicting percentage drop figures: 10.22% (material 1) vs 7.28% (material 2).
Summary written by AlphAI from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.