Western Digital Corporation (WDC) shares climbed Thursday in what traders call "sympathy trading" after Micron delivered earnings results that left Wall Street scrambling to revise their models upward.

The Micron Effect

Here's how this works: when a major semiconductor player posts results that blow past expectations, related companies often catch a ride higher. This is especially true for peers in memory and storage, where market conditions tend to affect everyone similarly.

Micron's numbers weren't just good—they were exceptional. The company reported adjusted earnings per share of $4.78, crushing the consensus estimate of $3.95. Revenue came in at $13.64 billion, handily beating the $12.83 billion analysts expected, according to MarketDash data.

But the real story was the guidance. Micron sees second-quarter revenue between $18.30 billion and $19.10 billion, compared to Wall Street's estimate of just $14.16 billion. That's not a beat—that's a statement. The company also expects adjusted earnings per share of $8.22 to $8.62, versus the consensus of $4.75.

"Our Q2 outlook reflects substantial records across revenue, gross margin, EPS and free cash flow, and we anticipate our business performance to continue strengthening through fiscal 2026," said Sanjay Mehrotra, chairman, president and CEO of Micron.

Micron closed the quarter sitting on $12 billion in cash, marketable investments and restricted cash.

Why Western Digital Benefits

Western Digital likely caught a tailwind because Micron's results point to something broader: strong demand and healthy pricing across the entire memory and storage market. When industry conditions are this favorable, investors assume peers will benefit from the same trends. That's exactly what sent Western Digital higher in sympathy.

At the time of writing, Western Digital shares were trading 6.64% higher at $177.30.