Western Digital’s SanDisk split has unlocked a focused AI-storage infrastructure leader with record margins, a net-cash balance sheet and a clear path to shareholder returns.
Overview
Western Digital has completed a major structural reset by spinning off SanDisk and becoming a focused, high-margin HDD infrastructure company. The AI-driven storage cycle is accelerating demand for nearline capacity, driving Q3 FY26 revenue up 45% year over year to $3.337 billion, gross margin to a record 50.5%, and free cash flow to $978 million. Debt reduction, investment-grade ratings, a $4 billion buyback and dividend growth support a Strong Buy thesis with a $550 target.