Western Digital (NASDAQ:WDC) Stock Falls 1.6% - Here's Why

Key Points

• Western Digital shares fell 1.6% to $380.71 amid heavier-than-average trading, as broader chip-sector weakness and investor concerns about AI spending weighed on the stock.
• The company’s fundamentals remain strong: quarterly revenue increased 43.8% year over year to $3.75 billion, adjusted EPS beat estimates, and management expects roughly $4.1 billion in next-quarter revenue.
• Investor caution reflects uncertainty over HDD supply, future pricing and competition from China, while UBS cut its price target. Analysts still hold a consensus “Moderate Buy” rating with an average target of $618.63 ahead of the October 22 earnings release.

Western Digital Corporation (NASDAQ:WDC - Get Free Report)'s share price fell 1.6% during trading on Tuesday. The stock traded as low as $358.26 and last traded at $380.71. Approximately 12,349,972 shares traded hands during trading, an increase of 43% from the average session volume of 8,644,241 shares. The stock had previously closed at $386.94.

Western Digital News Roundup

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

• Positive Sentiment: Western Digital’s recent results and outlook remain strong. Fiscal fourth-quarter revenue rose 43.8% year over year to $3.75 billion, while adjusted EPS exceeded expectations. Management has projected approximately $4.1 billion in next-quarter revenue and about $4.00 in non-GAAP EPS, supported by cloud demand, higher-capacity drives and AI-generated data growth. Western Digital AI-fueled outlook
• Neutral Sentiment: Investors are positioning ahead of Western Digital’s scheduled October 22 earnings release. Analysts expect very strong year-over-year earnings growth, but the report will need to confirm that recent demand, margins and favorable storage pricing can continue. Western Digital earnings preview
• Negative Sentiment: UBS lowered its price target while maintaining a neutral rating, citing uncertainty over HDD supply capacity and future pricing. The downgrade increased concern that storage demand and margins may not remain as strong as current estimates imply. Western Digital price-target cut
• Negative Sentiment: A broader global chip-sector selloff is weighing on WDC. China’s CXMT reportedly advanced a denser server-memory design, intensifying competitive concerns for memory and storage companies. Investors are also questioning whether massive AI infrastructure spending can continue at its current pace. US chip stocks slide on China competition and AI spending fears
• Negative Sentiment: Reported insider activity shows substantial selling and no insider purchases over the past six months, potentially adding to investor caution, although such transactions do not necessarily indicate a change in the company’s fundamentals.

Wall Street Analyst Weigh In

A number of brokerages have weighed in on WDC. The Goldman Sachs Group reduced their price target on Western Digital from $650.00 to $615.00 in a research report on Thursday, August 6th. Wedbush raised their price objective on Western Digital from $540.00 to $650.00 and gave the company an "outperform" rating in a research note on Monday, July 27th. Wall Street Zen lowered Western Digital from a "strong-buy" rating to a "buy" rating in a report on Sunday, August 16th. Zacks Research cut Western Digital from a "strong-buy" rating to a "hold" rating in a research report on Monday, October 5th. Finally, Melius Research set a $1,050.00 price target on Western Digital and gave the company a "buy" rating in a report on Monday, June 29th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have assigned a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average price target of $618.63.

Western Digital Price Performance

The business has a 50 day moving average price of $453.25 and a 200 day moving average price of $476.04. The firm has a market capitalization of $142.51 billion, a P/E ratio of 15.73, a price-to-earnings-growth ratio of 1.68 and a beta of 2.11.

Western Digital (NASDAQ:WDC - Get Free Report) last released its earnings results on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share (EPS) for the quarter, beating analysts' consensus estimates 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 for the quarter, compared to analyst estimates of $3.70 billion. During the same quarter last year, the firm posted $1.66 EPS. The company's 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. As a group, equities analysts expect that Western Digital Corporation will post 19.65 EPS for the current year.

Western Digital Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, September 17th. Investors 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 dividend on an annualized basis and a yield of 0.2%. Western Digital's payout ratio is 2.48%.

Insider Buying and Selling at Western Digital

In other Western Digital news, insider Cynthia Tregillis sold 432 shares of the stock in a transaction on Friday, September 4th. The shares were sold at an average price of $451.20, for a total value of $194,918.40. Following the completion of the sale, the insider directly owned 111,030 shares of the company's stock, valued at $50,096,736. This represents a 0.39% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 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 dated Friday, September 4th. The stock was sold at an average price of $459.87, for a total transaction of $825,466.65. Following the transaction, the insider owned 80,571 shares in the company, valued at approximately $37,052,185.77. The trade was a 2.18% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 25,437 shares of company stock valued at $11,461,345 in the last ninety days. Company insiders own 0.20% of the company's stock.

Institutional Inflows and Outflows

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

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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