Technology basket

The following basket contains only two companies from the technology sector. WDC provides memory chips and Amazon is a global technological company which provides various services to its clients. AMZ is one of the members of Mag-7 among Alphabet, Meta, Apple and others.

Recently we have seen decline in both stocks’ price dynamics due to several concerns over AI and huge CAPEX. Even though WDC competitors like Micron and Sandisc demonstrated turnaround and WDC might show the same pattern in the nearest future. Amazon could be considered as non-pure AI play as it has core e-commerce and advertisement businesses.

Western Digital Corporation [Internal score 60/100] is a global American technology giant specializing in data storage systems. Western Digital has become a pure-play provider in the hard disk drive (HDD) market. Additionally, the company supplies ultra-high-capacity HDDs (30+ TB) to major hyperscalers (Amazon Web Services, Microsoft Azure, Google Cloud). A focus on premium enterprise HDDs enables the company to increase its gross margins.

According to the financial report for the past quarter of 2026 revenue increased 44% y-o-y and amounted to $3.7B. EBITDA margin for the previous quarter was around 46% level. Net income exceeds $3.2 bln vs $579 mln for the same period in 2025. Revenue is expected to exceed 4B in the next two quarters. EBITDA margin level is forecasted to be closer to 50% for the next financial periods.

Amazon.com Inc [Internal score 74/100] is one of the largest technology companies in the world. Amazon Web Services generates core revenue (around 60% of operating income). According to Q2 2026 report, AWS growth accelerated to +36.7% y-o-y, showing the highest growth rate in recent years due to demand for AI infrastructure. Other two segments of Amazon business are Digital Advertising and E-Commerce & Logistics.

Revenue for the 2nd quarter of 2026 increased by 20% y-o-y to $200.6B, while operating profit soared by 43% to $27.5B. For the next two quarters revenue is expected to exceed $201B and $244B accordingly. Net Income for the past quarter exceeded $20.5B vs $18.5B in for the same quarter of 2025. Even though that FCF for the past quarter was negative and above 8.8B due to strong CapEx in AI infrastructure, analysts expect that FCF will turn positive already in the 4th quarter of 2026.

The pullback comes just before the events that should decide the next move. Western Digital reports on 22 October, giving investors a fresh read on enterprise HDD demand, pricing and supply conditions after the 9 October sell-off on Toshiba’s expansion plans. Amazon reports later in the month, and the key question is whether AWS keeps accelerating and cash flow starts to improve. The Fed meets on 27–28 October and is expected to hold, while yields remain high enough to support attractive structuring terms. We think the recent weakness already reflects much of the concern around supply and AI spending, while solid results from both companies could shift sentiment back towards their underlying growth.