I'll research WDC before writing the preview. Let me start by gathering recent filings, transcripts, news, and price data.I notice the fiscal calendar: WDC reports FY2026 Q4 tomorrow. I have transcripts through FY2026 Q3 (April 2026). Note the price tool returned 2025-dated data. Let me read the most recent earnings materials and try to get current-year data.I have strong fundamental data through Q3 FY26. Now let me get current-year context: analyst expectations for tomorrow, recent news/read-through from Seagate, and try 2026 price data.The price tool has 2026 data — WDC has been on a massive run. Let me fix the web search parsing.Let me get the Seagate read-through and more detail on the setup and estimates.I now have everything I need. Let me compile a few price statistics before writing.Here is the earnings preview.
WDC reports into one of the highest-expectations tape it has ever faced. This is now a pure-play, post-SanDisk HDD company riding a structural AI-storage upcycle, and the stock reflects it — shares are up roughly 610% over the past year (from ~$77 to ~$549), though they sit ~26% below the June 18 peak of $746. The key question tomorrow isn't whether the quarter is good — it almost certainly is — but whether the results and forward commentary are good enough to re-rate a stock that has already priced in a lot.
On the Q3 call (April 30, 2026), CFO Kris Sennesael guided Q4FY26 to:
| Metric | Guidance |
|---|---|
| Revenue | $3.65B ± $100M (≈ +40% YoY at midpoint; +36–44% YoY) |
| Non-GAAP gross margin | 51% – 52% |
| Operating expenses | $385M – $395M |
| Interest & other expense | ~$10M |
| Tax rate | ~16% |
| Non-GAAP EPS | $3.25 ± $0.15 |
| Diluted share count | ~385M |
Street consensus sits at the high end / slightly above: revenue ~$3.65B and non-GAAP EPS around $3.31–$3.35 (Zacks $3.35, TipRanks $3.31). Note the recent beat cadence — last quarter WDC reported $2.72 vs. a $2.39 consensus and $3.34B revenue vs. ~$3.25B expected. The market is clearly conditioned to expect a beat-and-raise, which raises the risk of a "good but not enough" reaction.
Seagate reported fiscal Q4 on July 28 and set a bullish tone for the whole HDD complex: - Revenue ~$3.6B (+~48% YoY), non-GAAP gross margin ~52.7%, and EPS ~$5.71 vs. ~$5.10 consensus — a large beat. - More importantly, Seagate guided next-quarter EPS to ~$7.30, and flagged HAMR (Mozaic) adoption reaching ~40% of exabytes.
WDC shares reacted directly — the stock jumped ~15% on July 30 (to $533 from $462) in the days after Seagate's print, and has since firmed to ~$549. That means a chunk of the "good news" may already be in the stock going into tomorrow.
The momentum is unambiguous: - Revenue $3.34B, +45% YoY / +11% QoQ, above the high end of guidance. - Non-GAAP gross margin 50.5% — first break above 50% — up 440 bps QoQ and 1,040 bps YoY. - Non-GAAP EPS $2.72, +97% YoY; non-GAAP operating margin 38.6%. - 222 exabytes shipped, +34% YoY; pricing +9% YoY per TB; cost per exabyte down ~10% YoY. - Mix is overwhelmingly cloud: Cloud 89% of revenue ($3.0B, +48% YoY), Consumer 6% ($186M), Client 5% ($179M). - FCF $978M (29% margin), OCF $1.12B on just $145M of capex.
Balance sheet transformed: monetizing 5.8M SanDisk shares cut debt by $3.1B, leaving only ~$1.6B convertibles and a net cash position (~+$450M); WDC earned investment-grade upgrades from S&P and Fitch. Capital returns are ramping — $752M of buybacks + $43M dividends in Q3, ~$2.2B returned since the program began in Q4FY25, and the dividend was raised 20% to $0.15/quarter.
1. The FY27 outlook / any first look at next year. With Seagate already guiding to a ~$7.30 EPS quarter, investors will want WDC to frame the trajectory beyond Q4. Management has said LTAs now extend into calendar 2028 and 2029, and reiterated conviction in >25% long-term exabyte CAGR. Concrete commentary on CY27 pricing/volume commitments will be the swing factor for the stock.
2. Gross margin trajectory. WDC guided 51–52% for Q4, but incremental gross margins have been running 70–75%, and Seagate just printed 52.7%. A beat above the range plus signals of continued expansion toward the mid-50s would be the cleanest bull catalyst. Watch pricing durability (the "predictable pricing" LTA philosophy) and continued cost-per-exabyte declines.
3. HAMR progress vs. Seagate. WDC is running a dual-track strategy: pushing ePMR aerial density (40TB next-gen ePMR into volume in 2H CY26) while qualifying HAMR. HAMR is in qualification with 4 customers, said to be ahead of schedule, with volume in 2027. Because Seagate is already at ~40% HAMR mix, any perception that WDC is "behind" on HAMR — or reassurance that ePMR + UltraSMR keeps it cost-competitive in the interim — will move the narrative.
4. UltraSMR adoption & supply discipline. Three of the largest customers have adopted UltraSMR; WDC targets ~60% of exabytes on UltraSMR by end of FY27. Critically, management insists it is not adding unit capacity, only aerial density (and possibly head/media investment) — the supply-restraint story is central to the pricing bull case. Watch for any change here.
5. Capital return & the last SanDisk stake. WDC still holds 1.7M SanDisk shares it intends to monetize tax-free before year-end CY26. Watch for another possible dividend increase, buyback pace, and how aggressively it deploys its now->30%-trending FCF margin.
6. Demand mix / hyperscaler commentary. Management describes broadly similar demand across its top-4 customers, with the AI "compounding loop" (training → inference → agentic → physical AI/synthetic data) as the structural driver. Any datapoint on order visibility, build-to-order coverage, or Tier-2 CSP expansion (via the UltraSMR JBOD platform) is incremental.
Bottom line: Fundamentals and the Seagate read-through point to another strong quarter and a Q4 that likely lands at/above the $3.65B / $3.25 EPS guide. The stock's reaction will hinge on the forward guide and FY27 framing — with the bar set high, WDC probably needs to beat and raise convincingly to justify further upside from here.
Note: figures are from WDC's fiscal 2026 earnings releases/calls and public sources; consensus and Seagate comparisons are drawn from third-party reporting and should be verified against the actual release.