The AI data center buildout is reshaping how storage companies sell their products, pushing buyers to commit years in advance rather than quarter by quarter.
Western Digital (NASDAQ: WDC) CEO Irving Tan said in late January that the company was “pretty much sold out for calendar ’26,” backed by firm purchase orders from its top seven customers.
Western Digital had multiyear agreements in place with three of its top five customers, two running through calendar 2027 and one extending through calendar 2028.
By late April, Tan was saying agreement durations had stretched even further, reaching into calendar 2028 and calendar 2029, reflecting intensifying demand from cloud operators.
Western Digital’s fiscal fourth-quarter revenue, for the three months ended July 3, 2026, reached $3.75 billion, representing a 44% increase from the same period a year earlier.
Non-GAAP gross margin jumped roughly 13 percentage points year over year to 54.4%, and earnings per share more than doubled during the same period.
Cloud customers accounted for 89% of revenue in the fiscal third quarter, making Western Digital overwhelmingly a data-center-focused business at this point.
Management guided for fiscal first-quarter revenue to grow between 42% and 49% year over year, placing the midpoint at approximately $4.1 billion.
Seagate Technology (NASDAQ: STX) goes further than Western Digital in locking down future demand, with management stating that product configurations and pricing are already set for all of calendar 2027.
Most of Seagate’s nearline exabyte capacity is already allocated into calendar 2028 under long-term supply agreements with cloud data center operators.
Seagate’s revenue for fiscal 2026 totaled $12.2 billion, up 34%, while the fiscal fourth quarter alone produced $3.63 billion, a 48% year-over-year jump.
Adjusted gross margin for Seagate hit 52.7%, up from 37.9% in the prior year, and non-GAAP earnings per share of $5.71 represented a 120% increase.
Seagate guided for approximately $4.1 billion in fiscal first-quarter revenue, implying roughly 56% year-over-year growth, a figure largely reflecting business already secured under contract.
Sandisk (NASDAQ: SNDK) has signed 10 long-term supply agreements covering eight customers, with price floors attached to protect revenue even in a declining market.
Management expects over half of Sandisk’s fiscal 2027 volumes and roughly two-thirds of fiscal 2028 shipments to fall under those agreements, with the contracts representing at least $93.9 billion of revenue at their floor prices.
Sandisk’s fiscal 2026 revenue climbed 175%, reaching $20.25 billion, driven by higher memory prices and a decisive shift toward data-center customers.
At approximately 15 times expected fiscal 2028 earnings, Seagate trades at roughly the same valuation as Western Digital relative to profits, but arguably with more of those profits already locked under contract.
A $2,000 budget buys about four shares of Western Digital at around $467, two shares of Seagate, or one share of Sandisk, based on recent trading prices.
The analyst’s pick among the three is Seagate, given that its contracts already fix pricing for all of calendar 2027 and most of its nearline capacity is spoken for well into the following year.
No contract makes the AI data center buildout permanent, and if spending slows, storage stocks could fall hard regardless of signed volumes or locked-in pricing agreements.
