What happened
Western Digital reported fiscal Q4 revenue of $3.75 billion, up 44% year over year, with full-year revenue reaching $12.92 billion. Teradata reported Q2 revenue of $410 million, with recurring revenue up 3% and free cash flow of $127 million.
Why it matters
Western Digital benefits from AI-driven storage demand with improving margins and strong cash generation, while Teradata is positioning for enterprise AI with its Autonomous Knowledge Platform and agentic AI capabilities. The article concludes WDC is the stronger AI data stock for investors prioritizing fundamental momentum and direct exposure to the AI infrastructure cycle.
What to watch
WDC carries a Zacks Rank #2 (Buy) and TDC has a Zacks Rank #3 (Hold). WDC's forward P/E is 19.92, lower than TDC's 14.44, but WDC has delivered a 446.2% gain over the past year versus TDC's 33.9%.
Ask the AI about this article →
The AI boom is driving demand across the data infrastructure stack, not just for GPUs and networking. Western Digital and Teradata occupy different niches: WDC provides high-capacity HDDs for persistent storage, benefiting from hyperscale demand and rising data volumes, while TDC focuses on organizing and governing enterprise data for AI applications. WDC's financial performance reflects this demand, with revenue up 44% year over year in fiscal Q4 and gross margins reaching 54.4%. Teradata, meanwhile, is investing in its Autonomous Knowledge Platform to enable agentic AI, but its near-term outlook remains challenging, with expected revenue declines in Q3. The article suggests that WDC has a clearer path to earnings growth, while TDC's potential upside depends on the success of its AI transformation. For investors, WDC currently appears as the higher-probability play, but TDC could surprise if its strategy gains traction.
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