Western Digital is emerging as a new AI storage winner as hyperscale cloud providers increase capacity for machine learning, driving demand for long-term cost-effective data storage. After separating its flash business into Sandisk in 2025, Western Digital is an independent HDD supplier focused on cloud and enterprise customers. Management indicated that nearly all of Western Digital's 2026 HDD capacity is already under contract, with long-term agreements extending into 2028 and 2029. In the third fiscal quarter ending March 2026, the company reported revenue of $3.34 billion, up 45% from the year prior. Adjusted Gross Margin exceeded 50% for the first time in company history at 50.5%, compared to 40% last year. Adjusted EPS nearly doubled to $2.72. The Average Selling Price per Exabyte increased 9% over the previous year, while Exabytes shipped increased 34%, demonstrating strong enterprise demand for high-capacity storage.