3. Western Digital Corporation (NASDAQ:WDC)
Forward P/E Ratio: 9.71
Earnings Growth This Year: 3858.70%
Number of Hedge Fund Holders: 66
Western Digital Corporation (NASDAQ:WDC) is a major technology company that specializes in data storage solutions. They manufacture and sell Hard Disk Drives (HDD) and Flash Storage drives, including Solid State Drives (SSDs).
The company, like other storage solution manufacturers, is experiencing increased demand for its products due to its application in powering AI and Data Centers. However, Western Digital Corporation (NASDAQ:WDC) exercises its competitive edge of higher gross margins over its competitors.
During the fiscal first quarter results of 2025, the company reported that it achieved record data center revenue for its Hard Drives. Its HDD revenue was $2.2 billion, representing an impressive 85% year-over-year increase. Management attributed this growth to the adoption of its UltraSMR technology, which enhances capacity and reliability. The Flash revenue was also remarkable and improved 21% year-over-year to reach $1.9 billion. Overall, the revenue for Western Digital Corporation’s (NASDAQ:WDC) FQ1 2025 grew by 49% to reach $4.1 billion with gross margins at 38.5%, up 3.4% year-over-year.
Looking ahead management is expecting revenue for the fiscal second quarter to be between $4.20 billion and $4.40 billion. It is one of the best affordable tech stocks to invest in now.
Parnassus Mid Cap Fund stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q2 2024 investor letter:
“We re-initiated a position in Western Digital Corporation (NASDAQ:WDC), a manufacturer of memory semiconductor chips and hard disk drives, as we believe earnings expectations are far too low. Semiconductors have been another of our most-alpha-generative industries, thanks to the industry’s secular tailwinds and our in-house expertise. Western Digital stands to benefit from the rapid growth of memory-hungry AI applications. The valuation for Western Digital was low relative to its peers, giving us a way to participate in AI at a reasonable valuation.”
