Western Digital (NASDAQ:WDC) Shares Down 3% - Should You Sell?

Key Points

• Western Digital shares fell 3% to about $447 amid a broader storage and semiconductor selloff, driven by concerns that more efficient AI systems could reduce future infrastructure demand, rising Treasury yields, higher oil prices and weakness in peers.
• Underlying results and analyst sentiment remain positive: Revenue rose 43.8% year over year, EPS beat estimates ($3.56 versus $3.31), and Citi raised its target to $740. Analysts maintain a “Moderate Buy” consensus with an average price target of $534.56.
• Near-term risks include insider selling and elevated volatility. Insiders sold roughly $11.5 million of stock over the past 90 days, while the company’s beta is 2.13; however, institutional investors own 92.51% of shares and Western Digital continues to forecast strong earnings.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares fell 3% on Friday . The company traded as low as $442.78 and last traded at $447.18. 4,964,309 shares were traded during mid-day trading, a decline of 42% from the average daily volume of 8,604,285 shares. The stock had previously closed at $460.93.

Key Headlines Impacting Western Digital

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

• Positive Sentiment: Bullish analyst view remains intact: Citi reaffirmed a Buy rating and raised its price target to $740, citing AI-driven storage demand that is outpacing supply. Recent analyst targets include a median of $597.50, with several targets ranging from $650 to $900. Western Digital Buy Rating Reaffirmed
• Positive Sentiment: Fundamental support: Western Digital’s latest reported quarter showed 43.8% year-over-year revenue growth, earnings above consensus and first-quarter fiscal 2027 guidance of $3.85–$4.15 per share. Bullish commentary argues that the recent correction removed speculative excess without undermining the company’s longer-term compounding potential. Western Digital The Correction Priced Out The Froth
• Neutral Sentiment: Short-interest data provides little signal: Reported short interest was zero shares, with a zero-day days-to-cover ratio, suggesting the data may be incomplete or unreliable rather than indicating meaningful short positioning.
• Negative Sentiment: DeepSeek-driven AI concerns pressured the sector: An apparent breakthrough in AI efficiency raised questions about how much computing and storage infrastructure future AI systems may require, contributing to a selloff across storage and semiconductor equities. Western Digital Stock Slips Friday
• Negative Sentiment: Macro and trading pressures added to the decline: Rising Treasury yields and higher oil prices hurt high-growth technology shares, while weakness in Micron and Seagate highlighted a broad memory and storage selloff. Recent insider filings also show substantial selling and no reported insider purchases, creating an additional near-term overhang. Western Digital Falls as Storage Stocks Slide

Wall Street Analysts Forecast Growth

A number of analysts have recently commented on the company. TD Cowen boosted their price objective on Western Digital from $500.00 to $540.00 and gave the stock a "buy" rating in a research note on Thursday, August 6th. Bank of America raised their target price on Western Digital from $610.00 to $732.00 and gave the company a "buy" rating in a research note on Wednesday, July 1st. Wall Street Zen cut shares of Western Digital from a "strong-buy" rating to a "buy" rating in a research report on Sunday, August 16th. Summit Insights downgraded shares of Western Digital from a "buy" rating to a "hold" rating in a report on Thursday, August 6th. Finally, Fox Advisors lowered shares of Western Digital from an "overweight" rating to an "equal weight" rating in a research report on Monday, June 22nd. Two equities research analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating and six have issued a Hold rating to the stock. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $534.56.

Western Digital Stock Down 3.0%

The business has a 50-day moving average price of $495.23 and a 200-day moving average price of $452.06. The company has a market capitalization of $154.13 billion, a price-to-earnings ratio of 18.47, a price-to-earnings-growth ratio of 2.05 and a beta of 2.13.

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

Western Digital Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 17th. Investors of record on Tuesday, September 8th will be given a $0.15 dividend. This represents a $0.60 annualized dividend and a dividend yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital's dividend payout ratio is 2.48%.

Insider Buying and Selling

In other Western Digital news, CEO Irving Tan sold 20,000 shares of the business's stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the sale, the chief executive officer directly owned 575,966 shares of the company's stock, valued at $256,287,591.02. The trade was a 3.36% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Cynthia L. Tregillis sold 1,007 shares of the stock in a transaction on Thursday, August 27th. The shares were sold at an average price of $478.36, for a total value of $481,708.52. Following the completion of the sale, the insider owned 112,155 shares of the company's stock, valued at $53,650,465.80. The trade was a 0.89% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 25,437 shares of company stock valued at $11,461,345. Company insiders own 0.18% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of WDC. Handelsbanken Fonder AB raised its holdings in shares of Western Digital by 71.4% in the second 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 during the last quarter. Nomura Asset Management Co. Ltd. grew its holdings in Western Digital by 33.6% during the 4th quarter. Nomura Asset Management Co. Ltd. now owns 1,122,095 shares of the data storage provider's stock worth $193,303,000 after acquiring an additional 282,156 shares during the last quarter. CloudAlpha Capital Management Limited Hong Kong acquired a new stake in Western Digital in the 4th quarter valued at about $20,889,000. World Investment Advisors increased its position in Western Digital by 145.8% in the 4th quarter. World Investment Advisors now owns 5,950 shares of the data storage provider's stock valued at $1,025,000 after acquiring an additional 3,529 shares in the last quarter. Finally, OMERS ADMINISTRATION Corp bought a new position in shares of Western Digital in the second quarter worth about $19,694,000. Hedge funds and other institutional investors own 92.51% of the company's stock.

About Western Digital

Western Digital Corporation NASDAQ: WDC develops, manufactures and sells data storage products and solutions for data centers, cloud service providers, enterprises, businesses and consumers. Its portfolio is centered on hard disk drives (HDDs), including high-capacity enterprise drives used in cloud and data center environments, as well as products for network-attached storage, surveillance and personal computing.

The company markets products under brands including Western Digital, WD, WD_BLACK and Ultrastar.

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