$Western Digital(WDC)$  Someone asked earlier why STX is up today while WDC is down, and whether they're basically the same company.

Honestly, right now STX might just be operating relatively better. If you listen to the conference call, the very first question, and several after that, touched on this directly. But stepping back a bit helps.

Over the last 2+ years, WDC took a different path on large HDDs. They developed and shipped SMR and ePMR large drives, while STX focused on getting HAMR to volume shipments. WDC's route was less risky and delivered quicker returns. STX has been working on HAMR for decades, going back to the Bill Watkins era. Through the 2020 to 2023 downturn, WDC looked like the safer bet, and their approach was better for profitability during those two years.

These days, the main customers just want large HDDs and don't really care about the underlying tech. STX has finally done a great job commercializing HAMR. WDC is more or less at the end of the line on ePMR with the 40TB ePMR shipping, and they're sampling 44TB HAMR. But there's no denying STX has a shipping lead on HAMR.

That's where the comparisons this past quarter and the next few quarters come in. WDC still reported gross margins above STX, but next quarter STX may match. They're playing catch-up to WDC. STX is also increasing revenue relatively more than WDC, and that's translating to STX EPS increasing more than twice as much versus WDC.

So for two years, WDC performed relatively better in HDD than STX. Looking at the respective balance sheets, WDC has improved significantly more than STX. Granted, SNDK accelerated some of that improvement, but for WDC, SNDK was the cause of balance sheet deterioration for about 10 years prior.

So right now, if you had to pick the better HDD company and could only choose one, it would probably be STX. Hence the better stock performance. But less than a year from now, you might not be able to tell much difference between them.