Western Digital (NASDAQ:WDC) Stock Jumps 3.9% on Analyst Upgrade

Key Points

• Western Digital shares rose 3.9% after Bank of America raised its price target from $720 to $800 and maintained a Buy rating.
• Analysts remain broadly bullish, with the stock carrying a “Moderate Buy” consensus rating and an average price target of $609.56. Optimism is supported by strong recent earnings and growing AI-related data-center storage demand.
• Investors should also consider risks, including high share-price volatility, dependence on continued AI and data-center spending, and notable insider selling activity.

Shares of Western Digital Corporation (NASDAQ:WDC - Get Free Report) were up 3.9% during mid-day trading on Wednesday after Bank of America raised their price target on the stock from $720.00 to $800.00. Bank of America currently has a buy rating on the stock. Western Digital traded as high as $381.88 and last traded at $378.51. 8,431,627 shares were traded during mid-day trading, a decline of 2% from the average daily volume of 8,639,396 shares. The stock had previously closed at $364.32.

Several other research analysts have also weighed in on WDC. Susquehanna lifted their target price on Western Digital from $360.00 to $500.00 and gave the stock a "neutral" rating in a report on Wednesday, July 8th. Mizuho set a $590.00 target price on Western Digital in a research note on Thursday, August 6th. Wells Fargo & Company lowered their price target on Western Digital from $730.00 to $450.00 and set an "overweight" rating for the company in a report on Friday, October 16th. Robert W. Baird set a $630.00 price target on Western Digital in a research report on Thursday, August 6th. Finally, UBS Group cut their price objective on Western Digital from $525.00 to $470.00 and set a "neutral" rating on the stock in a report on Monday, October 12th. One equities research analyst has rated the stock with a Strong Buy rating, twenty have given a Buy rating and seven have issued a Hold rating to the company's stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $609.56.

Insider Activity

In other news, insider Vidyadhara K. Gubbi sold 1,795 shares of Western Digital stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $459.87, for a total transaction of $825,466.65. Following the completion of the transaction, the insider directly 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 sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, insider Cynthia L. Tregillis sold 432 shares of the stock in a transaction dated Friday, September 4th. The shares were 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. The trade was a 0.39% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 24,629 shares of company stock valued at $11,033,404. 0.20% of the stock is owned by insiders.

Trending Headlines about Western Digital

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

• Positive Sentiment: Earnings optimism: Zacks says Western Digital has a strong earnings-surprise history and currently has the key factors that could support another beat. The company’s previous quarter exceeded both EPS and revenue expectations, with revenue rising 43.8% year over year. Why Western Digital Is Poised to Beat Earnings Estimates Again
• Positive Sentiment: AI storage demand: Western Digital is being viewed as an AI beneficiary as cloud providers seek higher-capacity hard drives and expand data-center infrastructure. Management previously forecast fiscal Q1 revenue growth of approximately 42% to 49% year over year, reinforcing expectations for strong results. Western Digital Rises Ahead of Earnings as Investors Bet on Strong Storage Demand
• Positive Sentiment: Favorable analyst view: Bank of America raised its price target to $800 and maintained a Buy rating. Morgan Stanley also expects strong results and better-than-expected guidance, saying it would be an aggressive buyer despite lowering its WDC target to $643 from $676. Analyst Sees Upside for Seagate and Western Digital
• Neutral Sentiment: Near-term catalyst and volatility: Thursday’s earnings release is likely to determine whether the recent recovery can continue. Shares remain highly volatile and below their 50-day and 200-day moving averages, making the report and management’s outlook especially important.
• Negative Sentiment: Spending risk: Jim Cramer warned that Western Digital could be vulnerable if data-center capacity growth or AI infrastructure spending slows, highlighting the stock’s dependence on continued capital investment. Cramer Warns About Data-Center Spending Risk
• Negative Sentiment: Insider selling: Reported insider activity shows 109 sales and no purchases over the past six months, a potential cautionary signal, although such transactions may reflect compensation or portfolio diversification rather than a fundamental outlook.

Hedge Funds Weigh In On Western Digital

A number of hedge funds have recently bought and sold shares of WDC. Crossmark Global Holdings Inc. increased its stake in Western Digital by 38.0% in the third quarter. Crossmark Global Holdings Inc. now owns 84,807 shares of the data storage provider's stock valued at $38,541,000 after acquiring an additional 23,370 shares during the period. LifeWealth Investments LLC bought a new position in Western Digital during the third quarter worth about $377,000. Carnegie Investment Counsel lifted its stake in Western Digital by 2.8% during the third quarter. Carnegie Investment Counsel now owns 3,794 shares of the data storage provider's stock worth $1,724,000 after purchasing an additional 104 shares during the period. Diversify Advisory Services LLC lifted its stake in Western Digital by 79.4% during the third quarter. Diversify Advisory Services LLC now owns 11,631 shares of the data storage provider's stock worth $5,286,000 after purchasing an additional 5,146 shares during the period. Finally, Commonwealth Financial Services LLC boosted its holdings in Western Digital by 3.0% during the third quarter. Commonwealth Financial Services LLC now owns 1,216 shares of the data storage provider's stock valued at $553,000 after purchasing an additional 35 shares in the last quarter. 92.51% of the stock is owned by institutional investors.

Western Digital Stock Up 3.9%

The business has a fifty day simple moving average of $439.65 and a two-hundred day simple moving average of $479.46. The company has a market capitalization of $141.68 billion, a price-to-earnings ratio of 15.63, a P/E/G ratio of 1.49 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 earnings per share (EPS) for the quarter, topping 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 analyst estimates of $3.70 billion. During the same period in the prior year, the company posted $1.66 earnings per share. The business's revenue for the quarter was up 43.8% compared to the same quarter last year. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. As a group, equities analysts predict that Western Digital Corporation will post 19.65 earnings per share for the current fiscal year.

Western Digital Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th were paid 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 of this dividend was Tuesday, September 8th. Western Digital's dividend payout ratio is 2.48%.

Western Digital Company Profile

Western Digital Corporation NASDAQ: WDC is a data storage technology company that develops and manufactures hard disk drives (HDDs) and related storage solutions. Its products are used in data centers, cloud infrastructure, enterprise systems, personal computers, gaming platforms and external storage devices.

The company offers HDD-based products for business and consumer applications, including high-capacity drives designed for hyperscale and cloud data centers, enterprise storage environments, network-attached storage systems and personal computing.

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