Western Digital (NASDAQ:WDC) Shares Down 10.2% - What's Next?

Key Points

• Western Digital shares fell 10.2% to $415.29 in heavy trading, despite the broader market opening higher; the decline was primarily tied to company- and industry-specific concerns.
• Toshiba’s reported plan to invest roughly $380 million to double HDD production by fiscal 2027 could ease supply constraints, intensify competition, and pressure Western Digital’s pricing, margins, and market share.
• Western Digital’s fundamentals remain strong, including 43.8% year-over-year quarterly revenue growth, earnings that exceeded estimates, and Q1 fiscal 2027 EPS guidance of $3.85–$4.15. Analysts maintain a “Moderate Buy” consensus with an average price target of $534.56.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares fell 10.2% on Friday. The stock traded as low as $396.57 and last traded at $415.29. 24,620,675 shares traded hands during trading, an increase of 186% from the average daily volume of 8,606,969 shares. The stock had previously closed at $462.56.

Western Digital News Roundup

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Analysts described the selloff as potentially excessive because demand for high-capacity HDDs remains strong, particularly from cloud providers and AI data centers. Western Digital recently reported fiscal fourth-quarter revenue growth of approximately 44% year over year, exceeded earnings expectations, and issued fiscal first-quarter 2027 EPS guidance of $3.85 to $4.15. STX, WDC Stocks Sink On Toshiba’s Reported Plan To Double AI Hard-Disk Capacity
• Positive Sentiment: Western Digital’s longer-term investment case remains supported by AI-driven storage demand, and some analysts believe the company’s strong operating momentum and industry growth could limit the impact of Toshiba’s expansion. Recent analyst price targets have generally remained well above the current trading level. Seagate vs. Western Digital: One Stock Is a Buy After Today’s Drop
• Neutral Sentiment: The broader market opened relatively strongly after a weaker-than-expected jobs report pushed Treasury yields lower, indicating that WDC’s decline was primarily company- and industry-specific rather than the result of broad market weakness. Tech Stocks Jump After Jobs Report Miss
• Negative Sentiment: Toshiba reportedly plans to invest about 60 billion yen, or roughly $380 million, to double HDD production in the Philippines by fiscal 2027. It is targeting approximately 30% of HDD capacity, up from just over 10%, potentially easing the supply shortage that has supported Western Digital’s pricing and valuation. Seagate, Western Digital Fall as Toshiba Plans AI Storage Expansion
• Negative Sentiment: Investors are reassessing whether tight HDD supply will remain a durable tailwind. A more aggressive Toshiba could intensify competition for cloud and AI data-center customers, creating risks for Western Digital’s future market share, revenue growth, margins, and pricing power. Seagate, Western Digital Shares Sink on Toshiba Production Report

Analysts Set New Price Targets

Several equities analysts recently issued reports on the stock. Susquehanna boosted their target price on shares of Western Digital from $360.00 to $500.00 and gave the company a "neutral" rating in a report on Wednesday, July 8th. Robert W. Baird set a $630.00 target price on Western Digital in a research report on Thursday, August 6th. UBS Group decreased their target price on Western Digital from $560.00 to $525.00 and set a "neutral" rating for the company in a research note on Thursday, August 6th. Melius Research set a $1,050.00 target price on Western Digital and gave the stock a "buy" rating in a report on Monday, June 29th. Finally, Weiss Ratings raised Western Digital from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Monday. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of $534.56.

Western Digital Price Performance

The firm has a fifty day simple moving average of $467.20 and a 200-day simple moving average of $470.83. The firm has a market cap of $143.14 billion, a P/E ratio of 17.15, a price-to-earnings-growth ratio of 1.93 and a beta of 2.11.

Western Digital (NASDAQ:WDC - Get Free Report) last released its quarterly earnings data on Wednesday, August 5th. The data storage provider reported $3.56 EPS for the quarter, beating the consensus estimate of $3.31 by $0.25. Western Digital had a return on equity of 48.15% and a net margin of 72.95%.The firm had revenue of $3.75 billion during the quarter, compared to the consensus estimate of $3.70 billion. During the same quarter in the previous year, the company posted $1.66 earnings per share. The company's quarterly revenue was up 43.8% on a year-over-year basis. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. On average, equities analysts predict that Western Digital Corporation will post 19.65 earnings per share for the current year.

Western Digital Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th were given a dividend of $0.15 per share. The ex-dividend date of this dividend was Tuesday, September 8th. This represents a $0.60 annualized dividend and a dividend yield of 0.1%. Western Digital's payout ratio is presently 2.48%.

Insider Buying and Selling

In related news, insider Cynthia Tregillis sold 432 shares of the firm's stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $451.20, for a total value of $194,918.40. Following the transaction, the insider owned 111,030 shares of the company's stock, valued at approximately $50,096,736. This trade represents a 0.39% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara Gubbi sold 1,795 shares of the business's stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $459.87, for a total value of $825,466.65. Following the sale, the insider directly owned 80,571 shares of the company's stock, valued at $37,052,185.77. This represents a 2.18% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 25,437 shares of company stock worth $11,461,345 in the last quarter. Insiders own 0.18% of the company's stock.

Hedge Funds Weigh In On Western Digital

A number of hedge funds have recently bought and sold shares of WDC. Handelsbanken Fonder AB grew its stake in Western Digital by 71.4% in the 2nd quarter. Handelsbanken Fonder AB now owns 230,578 shares of the data storage provider's stock valued at $147,275,000 after buying an additional 96,078 shares in the last quarter. OMERS ADMINISTRATION Corp purchased a new stake in shares of Western Digital during the second quarter worth $19,694,000. NewEdge Wealth LLC purchased a new position in shares of Western Digital in the second quarter valued at $14,466,000. OneAscent Financial Services LLC purchased a new position in shares of Western Digital in the second quarter valued at $1,599,000. Finally, Focus Partners Advisor Solutions LLC bought a new stake in shares of Western Digital during the 2nd quarter valued at $8,307,000. 92.51% of the stock is owned by hedge funds and other institutional investors.

Western Digital Company Profile

Western Digital Corporation NASDAQ: WDC develops, manufactures and supplies data-storage products and solutions. The company's portfolio is centered on hard disk drives (HDDs) used in cloud and enterprise data centers, personal computers, network-attached storage systems and other applications that require high-capacity data storage.

Western Digital markets products under brands including Western Digital, WD and Ultrastar. Its offerings include enterprise and data-center HDDs, storage products for business and consumer systems, and related technologies designed to help organizations store, manage and access large volumes of data.

Founded in 1970, Western Digital has evolved from a maker of electronic components into a global data-storage company.

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