Analyst Note| William Kerwin |
No-moat Western Digital reported strong fiscal second-quarter results, with both the top and bottom lines exceeding the FactSet consensus estimates by a healthy margin. Like the previous quarter, robust demand for notebooks, desktops, and retail products buoyed the firm's top and bottom lines. The company's relationships with major PC OEMs also helped drive a record level of exabyte shipments. On the other hand, however, the company saw revenue from its data center vertical plummet due to delays in cloud titan qualification. We are maintaining our $53 fair value estimate for Western Digital. With the company's share price up 11% after hours to $58, we recommend investors wait for a pullback before committing new capital to the name.