7. Western Digital Corporation (NASDAQ:WDC)
Market capitalization: $130.70 billion
Forward P/E: 8.64
Expected forward revenue growth: 46.52%
Number of hedge fund holders: 98
AI Creates the Data, and Storage Collects the Rent
Western Digital Corporation (NASDAQ: WDC) is benefiting from a practical consequence of the AI buildout: all that information needs somewhere to live. Fiscal first-quarter 2027 revenue reached $4.381 billion, up 55% year over year, according to its October 22 results. Adjusted gross margin expanded to 58.1%, adjusted earnings reached $4.64 per share, and free cash flow totaled $1.38 billion. Management also projected second-quarter revenue growth of 66% to 72%. Those figures strengthen the case for looking beyond the most visible AI chip stocks. Computing capacity attracts the headlines, but storing growing volumes of data can also become a highly profitable part of the infrastructure spending cycle.
The technology roadmap helps explain why investors are watching more than unit shipments. On the earnings call, management said qualifications for its first heat-assisted magnetic recording, or HAMR, product should finish with two hyperscale customers in the first quarter of calendar 2027, with volume shipments expected in the first half. Increasing the amount of data stored on each drive can improve the economics of serving customers without requiring an equivalent increase in physical drive production. Management also discussed demand visibility extending to 2030 and 2031 across its seven largest customers. That supports planning, although visibility should be treated as a guide to customer requirements rather than a guarantee that every anticipated purchase will arrive on schedule.
Chief executive Irving Tan said the company was “building an increasingly durable foundation for long-term value creation.” The board raised the quarterly dividend 17% to $0.175 per share, while the next-quarter outlook included approximately $5.1 billion in revenue and a 60.5% adjusted gross margin at the midpoints. The supplied forward P/E of 8.64 therefore sets up a familiar debate among investors seeking undervalued technology stocks: is the market overlooking durable earnings growth, or discounting unusually favorable conditions? Our reading is that the answer depends on pricing resilience and successful product transitions. Strong demand helps, but earning attractive returns through the next technology change will be the more persuasive evidence.
Ranking rationale: Western Digital Corporation (NASDAQ: WDC) ranks seventh with 98 hedge fund holders. Its 8.64 forward P/E and 46.52% expected revenue growth create a notable valuation-growth combination in the supplied screen. Expanding margins and the HAMR rollout support its operating case, while storage-cycle risk remains relevant.
