--- title: "Western Digital's cloud revenue rose 54% on a 28% price per terabyte, and the stock fell 7.5%" description: "Cloud revenue rose 54 percent and the consensus was raised 21.6 percent, yet the shares keep falling. The growth is mostly price, and the profit the multiple rests on is not all from drives." publisher: "The Inference" section: "Chips" published: 2026-11-03T15:25:23.509Z modified: 2026-11-03T15:25:23.509Z canonical: https://theinference.org/article/western-digital-s-cloud-revenue-rose-54-on-a-28-price-per-terabyte-and-the-stock-fell-7-5 language: en keywords: "Western Digital, Earnings, Storage, Hard Drives, AI Infrastructure" --- # Western Digital's cloud revenue rose 54% on a 28% price per terabyte, and the stock fell 7.5% > Cloud revenue rose 54 percent and the consensus was raised 21.6 percent, yet the shares keep falling. The growth is mostly price, and the profit the multiple rests on is not all from drives. [Western Digital](https://theinference.org/markets/companies/western-digital)'s cloud business just printed the best quarter in its history, and the stock fell anyway. In fiscal Q1 2027, [cloud revenue hit $3.9 billion, 88 percent of the company](https://www.theglobeandmail.com/investing/markets/stocks/WDC-Q/pressreleases/8595900/), up 54 percent year over year, while [the December quarter was guided up about 69 percent](https://www.trefis.com/stock/wdc/articles/621539/what-could-lift-western-digital-stock/2026-10-30) [1][2]. The shares still slid 7.5 percent on November 2 to $338.59, less than half their 52-week high of $799.87 [3]. The market is not arguing with the quarter. It is arguing with what the quarter is made of. ## The revenue line is a price line Two of Western Digital's own numbers decide the argument. Exabyte shipments rose 22 percent; the average price per terabyte rose 28 percent [1]. Price, not volume, is doing most of the work in that 54 percent cloud increase [1]. That is fine while the shortage lasts. It stops being fine when supply arrives, and the company says it will: exabyte supply growth is expected to accelerate through fiscal 2027 and 2028 [1], and [Toshiba plans to double AI data center drive capacity](https://theinference.org/article/western-digital-bets-on-denser-drives-not-more-factories-as-toshiba-doubles-output) [7]. [Seagate](https://theinference.org/markets/companies/seagate), which [grew revenue 61 percent](https://www.theglobeandmail.com/investing/markets/stocks/MU-Q/pressreleases/8595876/) on the same dynamics, has already [given back 30 percent in a month](https://finance.yahoo.com/markets/stocks/articles/seagate-just-dropped-30-month-031723929.html) on exactly this fear [5][7]. Both companies report price-led growth on a concentrated customer base, with visibility to the top seven customers but 88 to 81 percent of revenue in one end market [1][5]. *Chart: **Revenue has more than doubled in nine quarters, peaking at $4.4 billion** Western Digital quarterly revenue in billions of dollars, rising from about $2 billion in mid-2024 to $4.4 billion in the October 2026 quarter.* *Quarterly revenue in billions of dollars, fiscal periods labeled by calendar quarter, from Western Digital's SEC filings. [8]* ## The multiple is built on drive profit that is not all drive profit On Trefis's arithmetic from the company's own figures, about $4.8 billion of $9.90 billion of trailing net profit came from outside the operating business [2]. On operating profit alone the shares trade near 28 times earnings, not the 14.6 headline [2]. Meanwhile [insiders sold $76.8 million over twelve months](https://www.gurufocus.com/news/9163415/) and bought nothing, including [director Martin Cole's $1.58 million sale on October 30](https://www.investing.com/news/insider-trading-news/western-digital-director-martin-cole-sells-158m-in-shares-93CH-4988878), even as the fiscal 2026 consensus was raised 21.6 percent [3][4]. The de-rating has not made Western Digital cheap. It has made the operating number visible. The January print, where the price per terabyte line and the composition of net income both appear, is where this trade gets decided. ## Takeaway Western Digital's record cloud quarter is mostly price, not volume, and the profit the multiple rests on is not all from drives: nearly half the trailing net profit sits outside the operating business, insiders have sold $76.8 million and bought nothing, and the January print decides the trade. ## Sources 1. [Zacks via The Globe and Mail, Western Digital's 88% Cloud Revenue Share: Strength or Weakness?, 2 November 2026](https://www.theglobeandmail.com/investing/markets/stocks/WDC-Q/pressreleases/8595900/) 2. [Trefis, What Could Lift Western Digital Stock?, 30 October 2026](https://www.trefis.com/stock/wdc/articles/621539/what-could-lift-western-digital-stock/2026-10-30) 3. [GuruFocus, Western Digital Corp (WDC) Shares Fall 7.5% - What GF Score of 66 Tells Investors, 2 November 2026](https://www.gurufocus.com/news/9163415/) 4. [Investing.com, Western Digital director Martin Cole sells $1.58M in shares, 30 October 2026](https://www.investing.com/news/insider-trading-news/western-digital-director-martin-cole-sells-158m-in-shares-93CH-4988878) 5. [Zacks via The Globe and Mail, STX Falls 24.1% in the Past Month as Risks Test AI Storage Momentum, 2 November 2026](https://www.theglobeandmail.com/investing/markets/stocks/MU-Q/pressreleases/8595876/) 7. [Yahoo Finance, Seagate Just Dropped 30% in a Month. Is It Time to Sell, or Load Up?, 2 November 2026](https://finance.yahoo.com/markets/stocks/articles/seagate-just-dropped-30-month-031723929.html) 8. [Western Digital, quarterly figures from its SEC filings, retrieved 3 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000106040) --- Western Digital's cloud revenue rose 54% on a 28% price per terabyte, and the stock fell 7.5% — The Inference. Canonical: https://theinference.org/article/western-digital-s-cloud-revenue-rose-54-on-a-28-price-per-terabyte-and-the-stock-fell-7-5