Key Highlights

● Western Digital traded at $365.30 pre-market, down 7.61%, in a memory and storage selloff.

● No company announcement was found for Friday; the last results came on Oct. 22.

● Fiscal first-quarter Revenue rose 55% to $4.38 billion with a 57.8% GAAP gross margin.

● Guidance for fiscal second-quarter revenue is $5.1 billion, plus or minus $100 million.

Western Digital (NASDAQ:WDC) shares were falling sharply before Friday's open. According to market data, the stock was at $365.30, down 7.61%, as of 8:23 a.m. ET.

A sector move, not a company headline

No Western Digital announcement dated Friday was found. The company last reported results on Oct. 22. An automated market note pointed to concerns about hyperscaler Capital spending and to analyst downgrades, but no specific downgrade could be confirmed, and the note warns that it may not explain a given price move. The decline looks like part of a broad selloff in memory and storage stocks.

Peers were falling just as hard. Sandisk (NASDAQ:SNDK) sank 8.05% before the bell despite beating its own forecasts, amid concerns that memory pricing may be nearing a peak, according to market data. SK hynix dropped 8.3% in Seoul, and US chip stocks including Micron Technology (NASDAQ:MU), Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) were down between about 2% and 9%, according to media reports.

Why AI spending fears hit storage

The trigger was Thursday night's Earnings from Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC). Amazon outlined a 2026 capital spending plan of about $220 billion while its trailing free Cash Flow turned deeply negative, raising questions about how long the biggest cloud companies can keep spending at this pace. Intel's weak outlook added to the gloom, and its CEO blamed consumer resistance to higher PC prices caused by the memory chip shortage, according to market reports.

Western Digital is heavily exposed to that cycle, and its results have surged on the back of AI demand. It makes hard disk drives used to store vast amounts of data in cloud data centers, and Demand from AI-related build-outs has driven a dramatic surge in its results. Any sign that hyperscalers will slow spending, or that memory and storage prices have peaked, puts that growth story in question.

The company's fiscal first-quarter results showed how strong that demand has been. Revenue rose 55% from a year earlier to $4.38 billion, and GAAP gross Margin jumped to 57.8% from 43.5%, according to its Oct. 22 release. Non-GAAP earnings were $4.64 per share. It guided fiscal second-quarter revenue to $5.1 billion, plus or minus $100 million, with non-GAAP EPS of $5.80, plus or minus $0.20. It also raised its Dividend 17% to $0.175 a share and bought back about $1 billion of stock.

Index impact, risks and what to watch

Western Digital is a member of the S&P 500, so its slide adds to pressure on the benchmark, where S&P 500 futures were down about 1.1% around 8 a.m. ET, according to market quotes. Nasdaq-100 futures were down about 2.6%.

Strong guidance has not protected the stock this week. It fell about 3% on the day of its results, according to market data, suggesting investors were already worried that the cycle was near its high point. Risks from here include a pause in Data Center orders, a turn in pricing and heavy selling in crowded AI trades.

On the other side, the company's guidance points to further growth next quarter, and some investors may see the drop as a sector-driven overreaction. Investors will watch whether chip and storage stocks stabilize after the open, and for comments from cloud providers and from AMD and Qualcomm (NASDAQ:QCOM), which report next week. Any sign that Amazon, Microsoft (NASDAQ:MSFT) or Alphabet (NASDAQ:GOOGL) plan to trim data center budgets would hit storage names directly, while steady spending plans could help the group recover. Apple (NASDAQ:AAPL)'s results on Monday will also offer a read on consumer device demand.