Can Post-Quantum Cryptography Give WDC an Edge in AI Data Security?

Western Digital is embedding post-quantum cryptography into Ultrastar drives as hyperscalers qualify quantum-ready storage security.

As AI infrastructure expands, the value of stored data rises dramatically, making long-term data security one of the most pressing challenges facing storage companies today. This is where post-quantum cryptography (PQC) could become a major competitive advantage for Western Digital $WDC Corporation WDC. It recently integrated post-quantum cryptographic capabilities into its next-generation Ultrastar UltraSMR hard drives. Specifically, these drives are already undergoing qualification with multiple hyperscale customers, signaling that large-scale cloud and AI infrastructure providers are taking quantum-era security threats seriously.

WDC is addressing future AI data security risks with its new Ultrastar DC HC6100 UltraSMR drives by embedding post-quantum cryptography directly into the storage layer. Instead of depending on future software updates, WD is reinforcing device-level trust, especially in firmware integrity and key management. This is vital because compromised firmware could enable attackers to install malicious code on enterprise storage systems, seemingly legitimate, potentially exposing large volumes of AI training and hyperscale data. By incorporating quantum-resistant firmware signing, WD aims to secure the foundational “root of trust” for next-generation enterprise storage infrastructure.

A key part of WD’s announcement is that it is deploying standards-aligned cryptographic systems designed for real-world enterprise use. The implementation includes ML-DSA-87, a quantum-resistant algorithm standardized under NIST FIPS 204 for high-assurance code signing. Rather than abruptly dropping legacy systems, WD is adopting a dual-signing approach with both RSA-3072 and ML-DSA-87. It also announced the deployment of post-quantum-capable public key infrastructure and hardware security module workflows.

By embedding NIST-aligned post-quantum protections directly into enterprise storage hardware, Western Digital is positioning itself at the forefront of the next-generation cybersecurity transition.

How Does WDC Stack Up Against Rivals in AI Storage?

Seagate $STX Technology Holdings plc STX strategy rests on three pillars: durable storage demand, a strong technology roadmap and disciplined execution. AI-driven applications are accelerating data creation, increasing retention needs and expanding reliance on historical datasets from cloud to edge, reinforcing demand for cost- and energy-efficient, high-capacity HDDs. In April, Seagate introduced a lineup of new and updated storage solutions for consumers and professional users under its Seagate, FireCuda and LaCie brands. These include the Seagate One Touch desktop external hard drive, the FireCuda X $TWTR Vault hard drive and the LaCie 8big Pro5 multi-bay RAID storage system.

In 2025, WDC split its HDD and Flash businesses into two public companies, with the new SanDisk SNDK positioned to leverage its storage expertise to capitalize on AI-driven opportunities. Sandisk is benefiting from AI-led demand that is lifting enterprise SSD adoption and supporting pricing across NAND end markets. Management said NAND is becoming a critical part of AI inference architectures, such as KV cache and RAG, which expand low-latency flash needs beyond the model itself. Datacenter revenue is scaling as the company expands its enterprise SSD portfolio and prepares to add QLC products, which should raise mix quality over time.

WDC Price Performance, Valuation and Estimates

In the past six months, shares of WDC have surged 227.1% compared with the Zacks Computer-Storage Devices industry’s growth of 250.2%.

Image Source: Zacks Investment Research

In terms of forward price/earnings, WDC shares are trading at 28.87X, higher than the industry’s 12.15X.

Image Source: Zacks Investment Research

WDC’s estimate revisions are currently on an upward trajectory. The Zacks Consensus Estimate for WDC’s earnings for fiscal 2026 has been revised north 12% to $10.02 over the past 60 days, while the same for fiscal 2027 has gone up 23.3% to $17.19.

Image Source: Zacks Investment Research

Currently, Western Digital has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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