Western Digital Shares Fall Despite Earnings Beat as Rising Costs Overshadow Strong Guidance

Western Digital reported stronger-than-expected fiscal first-quarter results and issued upbeat guidance for the current quarter, but the stock still fell roughly 8% as rising costs overshadowed the headline numbers. The storage maker posted adjusted earnings of $4.64 per share for the quarter, well ahead of the $4.08 analysts had expected, while revenue climbed 55% year-over-year to $4.38 billion, also topping the $4.14 billion consensus.

Guidance that initially sent shares higher

Western Digital forecast second-quarter revenue of $5.0 billion to $5.2 billion, a midpoint roughly 12% above analyst expectations, along with adjusted earnings of $5.60 to $6.00 per share, a midpoint about 20% ahead of consensus. Shares initially jumped about 4% in after-hours trading on the results before reversing sharply lower, after executives flagged rising input costs and higher near-term capital expenditures on the earnings call.

The reversal came as broader selling in AI-linked stocks continued to weigh on the market, adding pressure to a report that, on its own numbers, beat expectations across nearly every metric. The pullback underscores how closely investors are now scrutinizing cost and spending commentary from companies tied to AI infrastructure demand, even when the underlying quarterly results and forward guidance come in well ahead of Wall Street's targets.