Western Digital (NASDAQ:WDC) Stock Jumps 1% - Time to Buy?

Key Points

• Western Digital shares rose 1% to approximately $397, supported by strong AI and hyperscale data-center demand. Recent earnings also exceeded expectations, with quarterly EPS of $3.56 versus the $3.31 consensus and revenue up 43.8% year over year.
• Analysts remain broadly optimistic, assigning the stock a consensus “Moderate Buy” rating and an average price target of $620.67, although targets vary widely and Goldman Sachs recently lowered its target to $615.
• Key risks include potential oversupply after Toshiba’s planned HDD capacity expansion, Western Digital’s concentrated customer base, and its elevated valuation. Recent insider selling and discounts on consumer HDD products add further caution.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) traded up 1% during trading on Friday. The stock traded as high as $398.28 and last traded at $397.28. 7,007,347 shares changed hands during trading, a decline of 19% from the average daily volume of 8,641,656 shares. The stock had previously closed at $393.31.

More Western Digital News

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

• Positive Sentiment: Demand from hyperscale data centers and AI workloads continues to support Western Digital’s storage business. Analysts believe disciplined industry supply could preserve favorable supply-demand conditions and sustain earnings momentum. Can Supply Discipline Sustain AI Storage Momentum for Western Digital
• Positive Sentiment: Commentary from Jim Cramer highlights that Western Digital and Seagate have refrained from aggressively adding capacity. That restraint could support pricing and margins if AI-driven storage demand remains strong. Seagate and Western Digital Capacity Strategy
• Neutral Sentiment: Western Digital’s long-term performance has benefited from the shift toward AI storage, but its outlook depends heavily on a concentrated customer base; one customer group reportedly accounts for 89% of revenue. That concentration increases both growth potential and execution risk. Western Digital’s AI-Driven Transformation
• Neutral Sentiment: A product comparison of Samsung’s 9100 Pro and Western Digital’s WD Black SN8100 keeps competition in consumer solid-state storage in focus, but it does not provide a clear new catalyst for WDC’s shares. Samsung 9100 Pro vs WD Black SN8100
• Negative Sentiment: Toshiba’s plan to nearly double HDD output for AI data centers raises the risk that additional industry supply could weaken pricing and challenge Western Digital’s currently elevated valuation. Is Western Digital Fully Valued After Toshiba’s HDD Expansion Plan?
• Negative Sentiment: Deep discounts on a WD 20TB desktop hard drive may raise concerns about promotional pricing, inventory levels or weaker consumer HDD demand, although the offer could also be retailer-specific. WD 20TB Desktop Hard Drive Discount

Analysts Set New Price Targets

Several research firms recently issued reports on WDC. Susquehanna raised their price objective on shares of Western Digital from $360.00 to $500.00 and gave the stock a "neutral" rating in a research report on Wednesday, July 8th. Melius Research set a $1,050.00 price target on shares of Western Digital and gave the company a "buy" rating in a research note on Monday, June 29th. Mizuho set a $590.00 price target on shares of Western Digital in a research report on Thursday, August 6th. Sanford C. Bernstein upped their price objective on Western Digital from $590.00 to $770.00 and gave the company an "outperform" rating in a report on Thursday, August 6th. Finally, The Goldman Sachs Group lowered their price objective on Western Digital from $650.00 to $615.00 in a research report on Thursday, August 6th. One investment analyst has rated the stock with a Strong Buy rating, twenty-one have assigned a Buy rating and six have given a Hold rating to the stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $620.67.

Western Digital Stock Up 1.0%

The business's 50-day simple moving average is $459.01 and its two-hundred day simple moving average is $474.72. The firm has a market capitalization of $148.71 billion, a price-to-earnings ratio of 16.41, a PEG ratio of 1.72 and a beta of 2.11.

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

Western Digital Dividend Announcement

The company also recently declared 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. This represents a $0.60 annualized dividend and a dividend yield of 0.2%. The ex-dividend date was Tuesday, September 8th. Western Digital's dividend payout ratio (DPR) is currently 2.48%.

Insider Activity

In related news, insider Cynthia L. Tregillis sold 432 shares of the firm's stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $451.20, for a total transaction of $194,918.40. Following the completion of the transaction, the insider directly owned 111,030 shares in the company, valued at $50,096,736. This trade represents a 0.39% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara K. Gubbi sold 1,795 shares of Western Digital stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $459.87, for a total value of $825,466.65. Following the completion of the transaction, the insider directly owned 80,571 shares of the company's stock, valued at approximately $37,052,185.77. This represents a 2.18% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 25,437 shares of company stock valued at $11,461,345. 0.18% of the stock is currently owned by corporate insiders.

Institutional Trading of Western Digital

Several hedge funds have recently made changes to their positions in the business. Legal & General Group Plc acquired a new stake in shares of Western Digital in the second quarter valued at $1,602,927,000. Anther Capital Ltd purchased a new stake in Western Digital during the 2nd quarter worth about $901,601,000. Deutsche Bank AG acquired a new stake in Western Digital in the 2nd quarter valued at about $885,565,000. Value Aligned Research Advisors LLC purchased a new stake in shares of Western Digital during the first quarter worth approximately $350,403,000. Finally, Trivest Advisors Ltd purchased a new stake in shares of Western Digital during the second quarter worth approximately $627,606,000. Institutional investors and hedge funds own 92.51% of the company's stock.

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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