$Apple(AAPL.US)$Western Digital(WDC.US) are two earnings reports worth watching today.
For Western Digital, AI data centers have strong demand for high-capacity HDDs and storage. Western Digital is a stock in the AI infrastructure theme, and its stock price has surged this year.
Revenue is approximately $3.23-3.25 billion.
EPS is approximately $2.35-2.39.
What's your take? Does it beat expectations? Are there any highlights?
The focus remains on the data center/cloud business, demand driven by high-capacity Nearline drives, and gross margin.
AI/HAMR technology progress is a long-term catalyst.
If demand remains strong and guidance is raised, the stock price is likely to react positively; otherwise, it may pull back. Free cash flow, capital returns, and high implied volatility mean large swings after the earnings report are common.
Compared to last quarter's $3.02 billion beat, the stock price still fell. The question is whether the growth momentum can be sustained.
Apple - reports after hours.
Recovery in China is a highlight. Watch ASP, the proportion of Pro series, and China's revenue contribution. Sustained recovery can boost confidence.
Stable high growth and high margins are the core of Apple's valuation. Watch for continued double-digit growth.
Gross margin costs, whether rising memory/storage prices and supply chain pressures will affect overall gross margin.
Apple has locked in NAND supply for early 2026, but new contract prices are higher, and DRAM pressure is greater.
Focus on gross margin and supply chain commentary during the earnings call.
Apple's comments on costs and China demand, and whether storage costs are controllable as expected will be market focus points.
Personally, I think Western Digital is the short-term highlight. AI storage demand is exploding, orders are already booked into 2028, gross margin is expanding, EPS is growing rapidly, and the earnings report is likely to beat expectations with strong guidance. I'm optimistic it will continue to rise.
Apple's valuation is reasonable, it's a cash flow behemoth with a deep ecosystem moat. Pressure from rising storage costs exists but is manageable.
I've allocated some to both companies. Not afraid of a drop in Apple, added 20% position.
Western Digital's cyclical nature is really strong, allocated 10% position.
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