Western Digital Is Riding the AI Demand Wave

Western Digital is a leader in hard disk drives. This market is concentrated, with only three players remaining: Western Digital, Seagate, and Toshiba. Seagate and Western Digital have jostled back and forth for top share over the last decade, while Toshiba remains a distant third. HDDs are being phased out in key end markets in favor of solid-state drives, but we still see a future for HDDs in data centers. Total cost of ownership still favors HDDs over SSDs for large workloads where controlling costs is paramount, but immediate read access is less important. This is commonly referred to as nearline storage, which we expect will make up almost all of Western’s business over time.