Western Digital Corp. (NASDAQ:WDC) said artificial intelligence (AI) customers are already negotiating long-term storage agreements extending over the next five years, giving the company greater visibility into future demand as hyperscalers continue building AI infrastructure.
Customers Seek Storage Agreements Through 2031
During the company’s fourth-quarter earnings call, CEO Irving Tan said Western Digital is in discussions with customers to extend long-term agreements beyond the current cycle, reflecting confidence that AI-driven storage demand will remain durable for years.
Tan said discussions with customers are already underway on long-term agreements covering 2029 through 2031, with both sides working through the commercial structure of those contracts.
“Visibility remains very strong,” he added, noting the company has “very good line of sight” into future exabyte demand.
AI Infrastructure Customers Lock In Capacity Years Ahead
AI customers are increasingly committing to infrastructure years in advance as they seek to secure capacity amid sustained demand growth.
In June, Micron Technology Inc. (NASDAQ:MU) said it had secured about $22 billion in customer commitments, including roughly $18 billion in cash deposits, under agreements spanning up to five years, while SK Hynix Inc. (NASDAQ:SKHY) said last month that AI customers are now providing financial deposits alongside long-term memory supply agreements to improve visibility into future demand.
Tan said Western Digital expects storage demand to remain durable as AI shifts from model training to inference, agentic AI and physical AI, with each phase generating and retaining larger volumes of data over time.
Strong AI Demand Lifts Results And Outlook
Western Digital reported fourth-quarter adjusted earnings of $3.56 per share, beating the Street estimate of $3.29, while revenue climbed 44% year over year to $3.75 billion, topping analysts’ expectations of $3.69 billion, according to Benzinga Pro.
The company also guided above Wall Street estimates for the first quarter, forecasting adjusted earnings of $3.85 to $4.15 per share, versus the $3.81 estimate and revenue of $4.0 billion to $4.2 billion, while analysts expect at $4.01 billion.
Price Action: The stock closed 5.36% lower on Wednesday at $519.17 and slumped further by 16.73% in the early hours of Thursday’s pre-market trading.
Benzinga edge rankings indicate WDC has a Momentum score in the 99th percentile and a Growth score in the 15th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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