Western Digital forecasts upbeat revenue but shares fall on lofty expectations

Aug 5 (Reuters) - Western ‌Digital forecast ​quarterly ​revenue slightly above Wall Street estimates on Wednesday, betting on strong AI-driven demand for ‌its hard disk drives.

Still, its shares dropped more ⁠than 9% in extended trading, after the forecast failed to ‌impress investors even though ‌the stock has tripled this year on expectations of sustained AI-driven growth.

Memory and storage stocks have soared ​this year as investors bet data-center demand will support pricing and fuel growth across the industry.

Here ⁠are some more details:

• Western Digital expects first-quarter revenue of $4.1 billion, ​plus or minus $100 million, with the midpoint a touch above analysts' average estimate of $4.04 billion, ​according to data compiled by ‌LSEG.

• It expects adjusted profit of $4 per share, plus or minus 15 cents, ⁠also above the estimate of $3.81.

• While demand from AI data centers remains strong, rising memory prices have slowed consumer ⁠electronics replacement cycles, weakening demand in the personal computer and ​consumer hard drive markets where the company also operates.

• Weakness in these smaller segments for Western Digital could offset some ‌of the momentum from its core data center business.

• It reported a 44% rise ‌in fourth-quarter revenue to $3.75 billion, beating the estimate ⁠of $3.69 billion.

• Adjusted profit ‌came in at $3.56 ​per share, compared with the estimate of $3.30.

(Reporting by Anhata Rooprai in Bengaluru; Editing by Shilpi ‌Majumdar)

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