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On the October 7, 2026 forward P/E snapshot, Western Digital (Nasdaq: WDC) looks modestly cheaper than Seagate Technology (Nasdaq: STX). That makes WDC a tentative value pick—not a proven winner: both companies reported strong FY2026 results, and their latest revenue outlooks are nearly identical.
What are you comparing when you compare WDC and STX?
Both companies sell hard disk drives (HDDs) for mass-capacity storage, with demand tied in part to cloud and data-center customers. But their business scopes are not identical. Western Digital completed the separation of its Flash business into Sandisk on February 21, 2025. Its current business is HDD-focused, so older Western Digital results that included Flash should not be treated as directly comparable to current results. Seagate describes its business as mass-capacity storage serving data-center and Edge/IoT markets.
The companies also identify data-center storage and AI-related workloads as demand drivers. Seagate said demand strengthened in FY2026, led by high-capacity nearline drives for data centers and increasing AI-related applications. That is the company’s account of its market, not an independent forecast that demand will keep growing at the same pace. See the Western Digital FY2026 annual report and Seagate FY2026 annual report.
How did the companies perform in FY2026?
Both reported annual revenue above $12 billion and generated substantial free cash flow. Western Digital reported higher revenue and free cash flow in the figures below, but the margin figures use different reporting periods and should not be read as a clean head-to-head comparison.
#1 Best Overall
- Plug-and-play expandability
- SuperSpeed USB 3.2 Gen 1 (5Gbps)
| Measure | Western Digital | Seagate Technology |
|---|---|---|
| FY2026 revenue | $12.919 billion | $12.195 billion |
| Revenue growth | Revenue rose from $9.520 billion in FY2025 to $12.919 billion in FY2026 | 34% in FY2026, as reported by Seagate |
| GAAP gross margin | 54.1% in Q4 FY2026 | 45.6% for FY2026 |
| GAAP operating margin | 37.3% in Q4 FY2026 | 33.6% for FY2026 |
| Free cash flow | $3.511 billion in FY2026 | $3.105 billion in FY2026 |
The revenue and margin figures come from the companies’ Western Digital FY2026 earnings release and Seagate FY2026 earnings release. The gross and operating margins shown are not period-matched: Western Digital’s are for its fourth quarter, while Seagate’s are for the full fiscal year. They suggest strong reported profitability at both companies, but do not establish that one has a higher full-year margin than the other. Free cash flow is a non-GAAP measure defined by each company, so the figures are not necessarily calculated on identical terms.
What do their latest outlooks say?
For Q1 FY2027, both companies guided to revenue around $4.1 billion. Western Digital gave a midpoint; Seagate gave a range. Their EPS guidance is not directly comparable because the companies have different share counts and make different non-GAAP adjustments.
| Q1 FY2027 guidance | Western Digital | Seagate Technology |
|---|---|---|
| Revenue | $4.1 billion midpoint | $4.0 billion–$4.2 billion |
| Non-GAAP gross margin | 55.5% midpoint | Not stated in the cited guidance |
| Non-GAAP diluted EPS | $4.00 midpoint | $7.30, plus or minus $0.20 |
These are company forecasts, not guaranteed results. Western Digital’s outlook is in its FY2026 earnings release; Seagate’s is in its FY2026 earnings release. Seagate CEO Dave Mosley characterized FY2026 as a year of 34% annual revenue growth, record profitability, and record free cash flow. That description is management’s assessment of the year, not a promise about future performance.
Rank #2
- High capacity in a small enclosure – The small, lightweight design offers up to 6TB* capacity, making WD Elements portable hard drives the ideal companion for consumers on the go.
- Plug-and-play expandability
- Vast capacities up to 6TB[1] to store your photos, videos, music, important documents and more
- SuperSpeed USB 3.2 Gen 1 (5Gbps)
Which stock is cheaper on the available valuation snapshot?
At the October 7, 2026 close, StockAnalysis showed a forward P/E of 20.43 for WDC and 22.52 for STX. On that dated snapshot, WDC was the less expensive stock relative to estimated earnings.
| Forward P/E at October 7, 2026 close | WDC | STX |
|---|---|---|
| Multiple | 20.43 | 22.52 |
The figures are third-party market snapshots from StockAnalysis’s WDC statistics page and StockAnalysis’s STX statistics page, based on share prices and earnings estimates. Prices and estimates can change, so these multiples are not current beyond that date and are not company-reported measures. A lower forward P/E does not establish that a stock is undervalued: the estimate may prove too optimistic, or investors may be assigning a lower multiple because they expect weaker or riskier future earnings.
What could make either investment case weaker?
Customer concentration at Western Digital
Western Digital’s ten largest customers accounted for 73% of FY2026 revenue. Its three largest customers represented 16%, 15%, and 13%, respectively. That concentration makes results more exposed to purchasing decisions and order timing at a relatively small group of customers. The figures are reported in the Western Digital FY2026 annual report.
Rank #3
- Reliable everyday computing
- Western Digital quality and reliability
- Free Acronis True Image WD Edition cloning software
- Capacities up to 12TB
Demand cycles and customer spending
Strong data-center demand can support drive sales, but it does not rule out a slowdown, delayed orders, or changes in customer spending. Both businesses are exposed to demand variability, and management outlooks can be affected by shifts in order timing and broader storage needs.
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Product execution and competitive conditions can affect profitability even when industry demand is healthy. The share prices also depend on what investors expect future earnings to be: if earnings fall short of estimates or the market assigns lower multiples to storage stocks, either company’s shares could decline. Neither FY2026 results nor Q1 guidance settles those risks.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to decide between WDC and STX
- Favor WDC if your main criterion is the dated valuation comparison. Its forward P/E was lower on October 7, 2026, and its reported FY2026 revenue and free cash flow were higher. The valuation edge is only a snapshot, while the financial comparisons have period and company-defined-measure caveats.
- Consider STX if you prefer its operating case. Seagate reported 34% FY2026 revenue growth and guided to a Q1 revenue range that includes $4.1 billion. That supports a strong recent-results case, but does not establish that its shares will outperform or that its higher snapshot multiple is justified.
- Recheck the assumptions before acting. Compare updated share prices and earnings estimates, then assess whether you expect data-center demand, customer spending, margins, and the companies’ execution to support those estimates. For WDC in particular, include its disclosed customer concentration in your risk assessment.
Based on the evidence available here, WDC is the tentative value pick because its October 7 forward P/E was lower. STX remains a credible alternative on the strength of its reported growth and outlook. The available figures do not establish intrinsic value, future share-price performance, or which stock is suitable for a particular investor.
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