Western Digital Corporation has fundamentally altered its business model following the SanDisk separation. By shedding the highly capital-intensive and intensely volatile NAND flash business, Western Digital is now an unencumbered, pure-play HDD manufacturer. The strategic rationale for this divestiture was to eliminate the conglomerate discount that had plagued the stock for years and to allow management to tailor its capital structure explicitly for the mass-capacity HDD market

The total addressable market (TAM) for Western Digital's products has undergone a structural shift over the last five years. Consumer and client-device storage has almost universally transitioned to solid-state drives (SSDs).

However, the enterprise and hyperscale cloud data center market has expanded exponentially. HDDs remain the only economically viable m ...