Western Digital upgraded to investment grade by S&P
TL;DR
S&P upgraded Western Digital to investment grade (BBB-) due to improved finances, lower leverage, and strong cash flow, boosting its stock and reducing borrowing costs. The stable outlook reflects confidence in its resilience amid ongoing industry challenges.
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Western Digital upgraded to investment grade by S&P
Western Digital Upgraded to Investment Grade by S&P Global Ratings
February 24, 2026
S&P Global Ratings upgraded Western Digital Corp.’s (WDC) corporate credit rating to ‘BBB-’ from ‘BB+,’ citing improved financial metrics, a stronger balance sheet, and a more conservative capital structure. The rating now places the storage solutions provider within investment grade territory, with a stable outlook.
The upgrade follows Western Digital’s successful refinancing of high-yield debt and its demonstrated ability to generate consistent cash flows. S&P highlighted the company’s 2025 adjusted EBITDA of $3.2 billion, a 12% year-over-year increase, and a net leverage ratio of 2.8x, down from 4.1x in 2023 according to the rating. Analysts also noted the company’s dominant market position in data storage, driven by sustained demand for cloud computing and artificial intelligence infrastructure according to market analysis.
Western Digital’s stock rose 4.2% in early trading on February 22 following the announcement, as investors reacted positively to the reduced credit risk profile. The company has benefited from a broader industry trend of improving margins in the NAND flash memory sector, though analysts caution that competitive pressures and supply chain volatility remain near-term challenges as industry reports indicate.
The rating agency emphasized that the ‘BBB-’ designation reflects Western Digital’s ability to withstand economic downturns, though S&P noted potential risks, including exposure to cyclical technology markets. Borrowing costs for the company are expected to decline as a result of the upgrade, potentially enhancing liquidity and attracting institutional investors previously restricted from holding non-investment-grade assets according to financial analysis.
With a stable outlook, S&P will continue to monitor Western Digital’s progress in reducing leverage and executing its long-term strategic initiatives. The upgrade underscores confidence in the company’s operational resilience but does not eliminate risks tied to macroeconomic shifts or technological disruption in the storage sector as noted in the report.
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