Western Digital Stock Pullback Despite Fiscal Q1 Beat Reflects AI Capex Concerns, Wedbush Says

12:21 PM EDT, 10/23/2026 (MT Newswires) -- Western Digital (WDC) stock price declined despite a fiscal Q1 beat as better near-term hard disk drive fundamentals failed to address future AI capital expenditure concerns, Wedbush said in a Friday research report. The company reported fiscal Q1 adjusted earnings late Thursday of $4.64 per diluted share, up from $1.78 a year earlier and above FactSet estimate of $4.11. Revenue for quarter was $4.38 billion, beating the consensus estimate of $4.14 billion. Management hinted that capex could be above the high end of the quarterly range in the current fiscal year and next, and hypothesized that Toshiba may be adding incremental unit capacity, which exacerbated HDD supply concerns, according to Wedbush. The company's much stronger-than-expected Q2 guidance indicates that Exabyte business growth trends continue into the coming quarter, according to the note. The sharp pricing acceleration in Q1 should also address any concerns around the company's ability to create more leverage in its business model, analysts wrote. The brokerage said it maintained its outperform rating on the stock and price target of $650 per share. Price: 349.90, Change: -4.29, Percent Change: -1.21