Post-split, Western Digital's high-capacity hard drives for cloud and AI data lakes, with HAMR lifting capacity and margins, could extend its growth for years; fiscal Q4 2026 revenue grew about 44% year over year to $3.8 billion, beating estimates, with strong free cash flow and buybacks.

Yes, well, I wanted to bring up a different stock in this field, but one that is also a very important player when we talk about the memory boom , and that is Western Digital .

So, if you're not familiar with this company, you know it's not as well-known a name as "Nvidia"; they make hard drives. Those are essentially rotating magnetic storage drives that remain, as you know, the cheapest way to store huge amounts of data.

So, after this split, which is the story of another video, Western Digital became a company specializing only in hard drive business. Today , approximately 90% of its revenue comes from selling high-capacity hard drives to businesses in the cloud and large-scale computing sector.

Therefore, they primarily sell storage devices directly to the world’s largest cloud and data center operators. We are talking here about clients such as Amazon, Microsoft, and Alphabet .

The rest of its business comes from sales to institutions and original equipment manufacturers for traditional server makers, but this part of the business is dwindling. It remains a profitable retail channel, but it is much smaller than the part Western Digital focuses on in the cloud and data centers.

Now, what I find really interesting , going back to that split I mentioned for the company that became " SanDisk," was that Western Digital was essentially trying to run two completely different businesses under one roof.

There was the flash memory side, which tended to behave like a volatile commodity cycle , and then there were the hard drives, which were historically slower-moving and more predictable.

Therefore, separating that really enabled Western Digital to focus on the core part of the business that drives profitability and growth.

This is particularly relevant at the present time. In fact, we are still in the early stages of building artificial intelligence, but much of that initial wave of interest we saw really went towards computing, such as graphics processing units and acceleration chips, the kind of thing that has Micron and Nvidia making headlines.

However, training and running AI models also generates huge amounts of data that must be stored somewhere. Believe it or not, hard drives remain the most cost-effective way to store most of them on a large scale.

Thus, Western Digital calls this an " AI data lake " opportunity. It is driving a real transformation of the company . This is a company that was previously just a hardware manufacturer, and is now really leaning towards an AI infrastructure strategy.

So, it was really interesting to see how the business had transformed. All AI activity, training data, model checkpoints, and records should end up in a cheaper and more permanent place than premium memory.

This is precisely the type of cost-sensitive storage that hard drives have always excelled at .

Now , to put some numbers into this growth story, Western Digital announced its fourth-quarter and fiscal year 2026 results in early August. For the last quarter of that fiscal year, revenues amounted to $3.8 billion .

That was an increase of about 44% year-on-year. It was a strong performance above analysts' estimates. Revenue for the previous quarter grew by 45% year-on-year. They have a strong free cash flow.

They were implementing a very strong capital repatriation program. They have already redistributed the profits. They have been buying back shares, especially after they sold their final stake in the spin-off SanDisk in February of this year.

It's a really interesting business, and it's in the midst of a technological transformation that I think could extend its growth trajectory for years . One of the key components of this growth pathway is something called heat-assisted magnetic recording, or HAMR .

This is a new hard drive technology that uses a laser to heat the surface of the disk for a short period of time . What does this mean? Essentially, it allows for a much higher data density per drive.

This will allow them to sell these higher-capacity engines and achieve larger profit margins. And of course , beyond that, the cloud and ultra-wide demand for storage capacity shows no sign of slowing down.

This is particularly evident as artificial intelligence models and the data pipelines that feed them continue to grow. So, this is another way I think Western Digital will benefit from.

So, if you're looking at this business, remember that this is a company that was known as a maker of highly cyclical commodity devices. It relies on its position as a player in artificial intelligence infrastructure.

It is a business with a very strong balance sheet and is much more focused than it was just a few years ago .

Yes, and I think the important thing about these three companies today is Micron, Western Digital, and Lam Research. As you know, they all benefit from the same trend, which is the expansion in the field of artificial intelligence.

We believe these are examples of three compelling growth stories , but we would like to hear your opinions in the comments.