Western Digital WDC signed a long-term agreement with Adeia ADEA to license Adeia's semiconductor patent portfolio, which includes the innovative hybrid bonding technology.
The partnership is likely to help Western Digital to expand its footprint in the semiconductor industry by leveraging Adeia’s intellectual property portfolio.
Per a report from Allied Market Research, the global semiconductor market was valued at $555.9 billion in 2021 and is expected to reach $1,033.5 billion by 2031, registering a CAGR of 6.21% from 2022 to 2031. The industry is likely to benefit from the ongoing digitalization and the rapid adoption of Internet of things, added the report.
Western Digital Corporation Price and Consensus
Western Digital Corporation price-consensus-chart | Western Digital Corporation Quote
In February, Adeia’s hybrid bonding technology was licensed by Qorvo to further expand its footprint in the semiconductor industry. Also, Micron Technology leveraged Adeia’s technology to develop next-generation memory devices.
Adeia develops and licenses its patented media innovations across the entertainment experience, including advertising, imaging, and content storage, allowing its users to smartly manage content and connections.
Western Digital is one of the leading hard disk drive producers globally, which are used in desktop PCs, servers, network-attached storage devices, video game consoles etc.
The company’s performance is affected by weakening consumer demand owing to prevailing global macroeconomic uncertainties and rising inflation.Also, the company expects enterprise solid-state drive product demand to be affected as large cloud customers have entered the digestion period.
For third-quarter fiscal 2023, the company expects non-GAAP revenues in the range of $2.6-$2.8 billion compared with the year-ago revenue of $4.381 billion. Management projects a non-GAAP loss per share between $1.40 and $1.70 compared with the year-ago earnings of $1.65 per share.
The company reported second-quarter fiscal 2023 non-GAAP loss of 42 cents per share, wider than the Zacks Consensus Estimate of 8 cents. The company had reported earnings of $2.30 per share in the prior-year quarter.
However, revenues of $3.107 billion beat the Zacks Consensus Estimate by 3.1%. The top line decreased 36% year over year.
At present, WDC carries a Zacks Rank #4 (Sell). Shares of the company have lost 31.6% compared with the sub-industry’s decline of 25.2%.
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Stocks to Consider
Some better-ranked stocks in the broader technology space are Arista Networks ANET, and Pegasystems PEGA, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.79 per share, up 11.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 21.2% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.35 per share, up 101.5% in the past 60 days.
Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of the company have declined 43.8% in the past year.
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