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WDC vs. PSTG: Which Storage Stock is the Safer Growth Play Right Now?
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Key Takeaways
WDC shipped 204 exabytes this quarter, up 23% YoY, driven by AI and cloud storage demand.
WDC raised its quarterly dividend 25% to 12.5 cents, returning $785M to shareholders since FY25.
WDC trades at 19.45X forward earnings, far below PSTG's 82.84X, highlighting valuation appeal.
Both Western Digital Corporation (WDC - Free Report) and Pure Storage, Inc.(PSTG - Free Report) operate in the data-storage & enterprise storage hardware/software industry. Each caters to demands for data storage, management and solutions, though with different business models - WDC through HDD/SSD manufacturing and PSTG through flash-based storage systems and software-driven solutions.
The global data storage market is expected to hit $1,304.7 billion by 2033 at a 16.44% CAGR from 2025 to 2033, as highlighted by the IMARC Group. This expansion is being fueled by greater business process automation, the surge in cloud computing and the wider shift toward remote work.
Both WDC & PSTG are well poised to capitalize on these growing trends. But based on fundamentals, valuations, growth prospects and the investors’ risk appetite, which stock offers more upside? Let’s analyse in detail.
The Case for WDC Stock
As a hard disk drive company with a clear strategic focus, Western Digital plays a crucial role in supporting the data-intensive AI ecosystem. The company is performing strongly, meeting customers’ accelerating need for exabytes of storage while maintaining solid financial results. Its continued focus on innovation and operational discipline positions the company well to capitalize on new growth opportunities as the AI revolution drives massive increases in data creation and storage demand.
Its storage portfolio, spanning from data centers to edge devices, continues to evolve in sync with the needs of AI-driven data growth. This strategic alignment is allowing the company to sustain revenue momentum amid a competitive landscape. It shipped a total of 204 exabytes to customers during the quarter, marking a 23% year-over-year increase. This included 2.2 million units of its latest-generation ePMR drives, featuring capacities of up to 26TB for CMR and 32TB for UltraSMR models. The company will begin qualifying its next-generation ePMR drives in early 2026, extending its proven, scalable technology. Combined with HAMR, these advancements will deliver higher-capacity drives to meet rising cloud and AI data demands.
For the fiscal second quarter, it expects continued revenue growth fueled by strong data center demand and improved profitability from increased adoption of higher-capacity drives. As agentic and multimodal AI expand across industries, AI applications are accelerating and driving strong, ongoing demand for scalable data infrastructure. AI now both consumes and generates massive volumes of data, making HDDs essential for reliable, cost-efficient storage of the growing zettabytes produced. Western Digital is also using AI internally to boost productivity and innovation, from faster firmware development to factory efficiency gains of up to 10% in select use cases.
Image Source: Zacks Investment Research
In addition, WDC continues to balance strategic investment with strong shareholder returns. Its board approved a 25% increase in the quarterly dividend to 12.5 cents, showcasing the company’s momentum and financial health. Strong free cash flow and expanding gross margins underscore solid demand execution and cost control. In the fiscal first quarter, it generated $672 million in operating cash, repurchased 6.4 million shares for $553 million and paid $39 million in dividends. Since launching its capital return program in fiscal 2025, Western Digital has returned $785 million to shareholders, reinforcing its disciplined approach to capital allocation.
Nonetheless, WDC faces near-term risks from macro volatility, tariffs and global trade tensions, which can cause demand fluctuations across enterprise, distribution and retail channels. The rapid AI-driven spike in storage needs also adds pressure, as higher-capacity drives bring greater manufacturing complexity and longer production cycles. In addition, the company’s elevated debt burden limits flexibility for accretive acquisitions and other growth initiatives.
The Case for PSTG Stock
Pure Storage continues to benefit from increasing customer adoption of its Enterprise Data Cloud (EDC) architecture and strong traction with hyperscalers, all while keeping a positive outlook and executing with discipline despite ongoing macroeconomic uncertainty.
PSTG’s momentum is driven by the strong value of its Pure Storage platform, built on the simplicity and reliability of the Purity operating system. Purity powers true non-disruptive evergreen services and the industry-leading Storage-as-a-Service model, Evergreen//One. With the addition of Fusion v2, it now allows customers to build their own EDC, automating storage and enabling software-defined data management. It also remains at the forefront of supporting customers as they transition to modern virtualization, containers, Kubernetes and cloud environments.
Rising demand for FlashBlade solutions, including FlashBlade//E, continues to support Pure Storage’s growth. FlashBlade delivers multi-petabyte performance for modern unstructured file and object workloads, while FlashBlade//E provides a scalable repository for large-capacity data. Customers can also access these systems through the Evergreen//One Storage-as-a-Service tier. FlashBlade is built to handle the massive data requirements of AI training and AI-driven applications. PSTG has expanded its Flash lineup with next-generation systems—FlashArray//XL, FlashArray//S and FlashBlade//S—optimized for high-performance, scalable workloads with unified block, file and object support. This broader portfolio strengthens Pure Storage’s presence across various sectors, including finance, healthcare, AI startups and cloud providers.
Pure Storage continues to benefit from a growing and delighted customer base, reflected in its industry-leading NPS of 81. In the fiscal second quarter, the company added more than 300 new customers, bringing its total to more than 13,500, including 62% of the Fortune 500. Increasing penetration into the Global 2000 underscores the strength of its portfolio, innovation pipeline and partner ecosystem. Major enterprises are expanding their use of Pure solutions. A global IT services provider is adopting its platform to eliminate silos and manage a rapidly growing data estate, while a leading automotive company has broadened its deployment of Portworx into core operations. Subscription ARR reached nearly $1.8 billion, up 18% year over year.
Image Source: Zacks Investment Research
However, PSTG faces mounting competition in the flash storage market, which could weigh on average selling prices and hurt results if volumes don’t rise meaningfully. Customers are also dealing with higher software, SaaS and cloud costs, as well as uncertainty around AI spending, straining budgets. Rising NAND prices and shifting tariffs add further margin and macro risk. The company continues to post operating losses, with a $1.35 billion accumulated deficit, and near-term conditions may worsen given economic uncertainty and ongoing investment needs. While long-term investors may remain patient, the near-term outlook warrants caution.
The company is set to report fiscal third-quarter results on Dec. 2, 2025. It has an Earnings ESP of -0.85% and a long-term EPS growth rate of 16.8%.
Price Performance and Valuation for PSTG & WDC
Over the past year, WDC has gained 120.6%, outpacing PSTG and the Zacks Computer-Storage Devices industry’s growth of 62.2% and 57.8%, respectively.
Image Source: Zacks Investment Research
WDC looks more attractive than PSTG from a valuation standpoint. Going by the price/earnings ratio, WDC’s shares currently trade at 19.45X forward earnings, much lower than 82.84X for PSTG.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for PSTG & WDC?
The Zacks Consensus Estimate for PSTG’s earnings for fiscal 2026 has remained stagnant at $1.97 over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WDC’s earnings for fiscal 2026 has been revised up 13% to $7.38 over the past 60 days.
Image Source: Zacks Investment Research
PSTG or WDC: Which is a Better Buy?
Both WDC and PSTG are poised to capitalize on the emerging data storage industry, capturing growth across multiple end-markets, from AI to enterprise to consumer storage.
WDC at present sports a Zacks Rank #1 (Strong Buy), while PSTG has a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank and valuation, WDC seems to be a better pick at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
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WDC vs. PSTG: Which Storage Stock is the Safer Growth Play Right Now?
Key Takeaways
Both Western Digital Corporation (WDC - Free Report) and Pure Storage, Inc.(PSTG - Free Report) operate in the data-storage & enterprise storage hardware/software industry. Each caters to demands for data storage, management and solutions, though with different business models - WDC through HDD/SSD manufacturing and PSTG through flash-based storage systems and software-driven solutions.
The global data storage market is expected to hit $1,304.7 billion by 2033 at a 16.44% CAGR from 2025 to 2033, as highlighted by the IMARC Group. This expansion is being fueled by greater business process automation, the surge in cloud computing and the wider shift toward remote work.
Both WDC & PSTG are well poised to capitalize on these growing trends. But based on fundamentals, valuations, growth prospects and the investors’ risk appetite, which stock offers more upside? Let’s analyse in detail.
The Case for WDC Stock
As a hard disk drive company with a clear strategic focus, Western Digital plays a crucial role in supporting the data-intensive AI ecosystem. The company is performing strongly, meeting customers’ accelerating need for exabytes of storage while maintaining solid financial results. Its continued focus on innovation and operational discipline positions the company well to capitalize on new growth opportunities as the AI revolution drives massive increases in data creation and storage demand.
Its storage portfolio, spanning from data centers to edge devices, continues to evolve in sync with the needs of AI-driven data growth. This strategic alignment is allowing the company to sustain revenue momentum amid a competitive landscape. It shipped a total of 204 exabytes to customers during the quarter, marking a 23% year-over-year increase. This included 2.2 million units of its latest-generation ePMR drives, featuring capacities of up to 26TB for CMR and 32TB for UltraSMR models. The company will begin qualifying its next-generation ePMR drives in early 2026, extending its proven, scalable technology. Combined with HAMR, these advancements will deliver higher-capacity drives to meet rising cloud and AI data demands.
For the fiscal second quarter, it expects continued revenue growth fueled by strong data center demand and improved profitability from increased adoption of higher-capacity drives. As agentic and multimodal AI expand across industries, AI applications are accelerating and driving strong, ongoing demand for scalable data infrastructure. AI now both consumes and generates massive volumes of data, making HDDs essential for reliable, cost-efficient storage of the growing zettabytes produced. Western Digital is also using AI internally to boost productivity and innovation, from faster firmware development to factory efficiency gains of up to 10% in select use cases.
Image Source: Zacks Investment Research
In addition, WDC continues to balance strategic investment with strong shareholder returns. Its board approved a 25% increase in the quarterly dividend to 12.5 cents, showcasing the company’s momentum and financial health. Strong free cash flow and expanding gross margins underscore solid demand execution and cost control. In the fiscal first quarter, it generated $672 million in operating cash, repurchased 6.4 million shares for $553 million and paid $39 million in dividends. Since launching its capital return program in fiscal 2025, Western Digital has returned $785 million to shareholders, reinforcing its disciplined approach to capital allocation.
Nonetheless, WDC faces near-term risks from macro volatility, tariffs and global trade tensions, which can cause demand fluctuations across enterprise, distribution and retail channels. The rapid AI-driven spike in storage needs also adds pressure, as higher-capacity drives bring greater manufacturing complexity and longer production cycles. In addition, the company’s elevated debt burden limits flexibility for accretive acquisitions and other growth initiatives.
The Case for PSTG Stock
Pure Storage continues to benefit from increasing customer adoption of its Enterprise Data Cloud (EDC) architecture and strong traction with hyperscalers, all while keeping a positive outlook and executing with discipline despite ongoing macroeconomic uncertainty.
PSTG’s momentum is driven by the strong value of its Pure Storage platform, built on the simplicity and reliability of the Purity operating system. Purity powers true non-disruptive evergreen services and the industry-leading Storage-as-a-Service model, Evergreen//One. With the addition of Fusion v2, it now allows customers to build their own EDC, automating storage and enabling software-defined data management. It also remains at the forefront of supporting customers as they transition to modern virtualization, containers, Kubernetes and cloud environments.
Rising demand for FlashBlade solutions, including FlashBlade//E, continues to support Pure Storage’s growth. FlashBlade delivers multi-petabyte performance for modern unstructured file and object workloads, while FlashBlade//E provides a scalable repository for large-capacity data. Customers can also access these systems through the Evergreen//One Storage-as-a-Service tier. FlashBlade is built to handle the massive data requirements of AI training and AI-driven applications. PSTG has expanded its Flash lineup with next-generation systems—FlashArray//XL, FlashArray//S and FlashBlade//S—optimized for high-performance, scalable workloads with unified block, file and object support. This broader portfolio strengthens Pure Storage’s presence across various sectors, including finance, healthcare, AI startups and cloud providers.
Pure Storage continues to benefit from a growing and delighted customer base, reflected in its industry-leading NPS of 81. In the fiscal second quarter, the company added more than 300 new customers, bringing its total to more than 13,500, including 62% of the Fortune 500. Increasing penetration into the Global 2000 underscores the strength of its portfolio, innovation pipeline and partner ecosystem. Major enterprises are expanding their use of Pure solutions. A global IT services provider is adopting its platform to eliminate silos and manage a rapidly growing data estate, while a leading automotive company has broadened its deployment of Portworx into core operations. Subscription ARR reached nearly $1.8 billion, up 18% year over year.
Image Source: Zacks Investment Research
However, PSTG faces mounting competition in the flash storage market, which could weigh on average selling prices and hurt results if volumes don’t rise meaningfully. Customers are also dealing with higher software, SaaS and cloud costs, as well as uncertainty around AI spending, straining budgets. Rising NAND prices and shifting tariffs add further margin and macro risk. The company continues to post operating losses, with a $1.35 billion accumulated deficit, and near-term conditions may worsen given economic uncertainty and ongoing investment needs. While long-term investors may remain patient, the near-term outlook warrants caution.
The company is set to report fiscal third-quarter results on Dec. 2, 2025. It has an Earnings ESP of -0.85% and a long-term EPS growth rate of 16.8%.
Price Performance and Valuation for PSTG & WDC
Over the past year, WDC has gained 120.6%, outpacing PSTG and the Zacks Computer-Storage Devices industry’s growth of 62.2% and 57.8%, respectively.
Image Source: Zacks Investment Research
WDC looks more attractive than PSTG from a valuation standpoint. Going by the price/earnings ratio, WDC’s shares currently trade at 19.45X forward earnings, much lower than 82.84X for PSTG.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for PSTG & WDC?
The Zacks Consensus Estimate for PSTG’s earnings for fiscal 2026 has remained stagnant at $1.97 over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for WDC’s earnings for fiscal 2026 has been revised up 13% to $7.38 over the past 60 days.
Image Source: Zacks Investment Research
PSTG or WDC: Which is a Better Buy?
Both WDC and PSTG are poised to capitalize on the emerging data storage industry, capturing growth across multiple end-markets, from AI to enterprise to consumer storage.
WDC at present sports a Zacks Rank #1 (Strong Buy), while PSTG has a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank and valuation, WDC seems to be a better pick at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.