Western Digital (NASDAQ:WDC) Trading 4.1% Higher - Still a Buy?

Key Points

• Western Digital shares rose 4.1% to $441.36 on elevated trading volume, supported by strong quarterly results: revenue increased 43.8% year over year to $3.75 billion and adjusted EPS of $3.56 beat estimates.
• Investor sentiment is being supported by expected AI-driven data-center storage demand and plans to redeem the company’s remaining 2028 convertible notes, while analysts maintain a “Moderate Buy” consensus with an average price target of $534.56.
• Risks include continued stock volatility, trading below its 50-day and 200-day moving averages, and insider activity consisting entirely of sales over the past six months.

Shares of Western Digital Corporation (NASDAQ:WDC - Get Free Report) were up 4.1% during mid-day trading on Friday . The stock traded as high as $448.85 and last traded at $441.36. Approximately 13,391,193 shares were traded during trading, an increase of 56% from the average daily volume of 8,606,059 shares. The stock had previously closed at $423.87.

Key Stories Impacting Western Digital

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

• Positive Sentiment: Western Digital’s latest quarterly results remain a key support: revenue grew 44% year over year, earnings exceeded expectations, margins expanded and cash generation was strong. Its first-quarter 2027 earnings outlook also implied continued substantial year-over-year growth. Western Digital rises as investors weigh strong fundamentals, debt cleanup, and a firmer storage trade
• Positive Sentiment: The company’s plan to redeem its remaining 3.00% convertible notes due in 2028 is being viewed favorably because it could simplify the capital structure and reduce future dilution. The notes became redeemable after WDC’s share price surpassed the required threshold, signaling sustained investor confidence. What’s Going On With Western Digital Stock Friday?
• Positive Sentiment: Strength in storage peers, particularly SanDisk, Micron and the broader AI-infrastructure trade, provided a favorable read-through for WDC. Investors continue to anticipate durable demand for data-center storage driven by artificial intelligence. Analysts’ recent price targets also remain generally above the current trading level. SanDisk Jumps as Storage Bid Concentrates in One Name; Western Digital Rises, Micron Ticks Up
• Neutral Sentiment: Recent commentary comparing WDC with SanDisk highlights different exposure to HDDs and NAND flash, as well as varying margins and risks. This reinforces the long-term AI-storage opportunity but also underscores that the companies’ growth profiles are not identical. Western Digital vs. SanDisk: Which Storage Stock Is the Better Bet?
• Negative Sentiment: Insider trading data is a cautionary signal: reported open-market insider activity over the past six months consisted entirely of sales, with no purchases. In addition, WDC recently experienced a pullback and has traded below its 50-day and 200-day moving averages, indicating ongoing volatility despite the improving fundamentals.

Analysts Set New Price Targets

Several equities analysts have recently weighed in on WDC shares. Robert W. Baird set a $630.00 price objective on shares of Western Digital in a research report on Thursday, August 6th. TD Cowen lifted their price target on Western Digital from $500.00 to $540.00 and gave the stock a "buy" rating in a research note on Thursday, August 6th. Evercore restated an "outperform" rating and set a $575.00 price objective on shares of Western Digital in a report on Tuesday, May 26th. Susquehanna lifted their target price 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. Finally, Wells Fargo & Company boosted their price target on shares of Western Digital from $575.00 to $730.00 and gave the company an "overweight" rating in a report on Friday, July 10th. Two equities research analysts have rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and six have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $534.56.

Western Digital Stock Up 4.1%

The company has a market cap of $152.13 billion, a price-to-earnings ratio of 18.23, a PEG ratio of 1.77 and a beta of 2.13. The business has a 50-day simple moving average of $482.23 and a two-hundred day simple moving average of $457.16.

Western Digital (NASDAQ:WDC - Get Free Report) last released its quarterly earnings results on Wednesday, August 5th. The data storage provider reported $3.56 EPS for the quarter, beating analysts' consensus estimates of $3.31 by $0.25. Western Digital had a net margin of 72.95% and a return on equity of 48.15%. The company 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 earnings per share. The company's quarterly revenue 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 anticipate that Western Digital Corporation will post 19.65 earnings per share for the current year.

Western Digital Announces Dividend

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 0.1%. Western Digital's payout ratio is 2.48%.

Insider Buying and Selling at Western Digital

In other news, insider Vidyadhara K. Gubbi sold 1,795 shares of the company's stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $459.87, for a total transaction of $825,466.65. Following the completion of the transaction, the insider 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. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Cynthia L. Tregillis sold 432 shares of Western Digital stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $451.20, for a total value of $194,918.40. Following the sale, the insider directly owned 111,030 shares in the company, valued at approximately $50,096,736. This trade represents a 0.39% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 25,437 shares of company stock valued at $11,461,345 in the last ninety days. Company insiders own 0.18% of the company's stock.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. ABS Direct Equity Fund LLC lifted its holdings in shares of Western Digital by 112.8% during the 2nd quarter. ABS Direct Equity Fund LLC now owns 1,277 shares of the data storage provider's stock worth $816,000 after acquiring an additional 677 shares during the period. Sequoia Financial Advisors LLC increased its stake in Western Digital by 3.5% in the second quarter. Sequoia Financial Advisors LLC now owns 17,263 shares of the data storage provider's stock valued at $11,026,000 after acquiring an additional 579 shares during the period. MCF Advisors LLC raised its position in Western Digital by 480.4% in the second quarter. MCF Advisors LLC now owns 296 shares of the data storage provider's stock worth $189,000 after purchasing an additional 245 shares in the last quarter. Archford Capital Strategies LLC acquired a new position in Western Digital in the second quarter worth about $384,000. Finally, WINTON GROUP Ltd lifted its stake in Western Digital by 1.3% during the second quarter. WINTON GROUP Ltd now owns 24,252 shares of the data storage provider's stock worth $15,490,000 after purchasing an additional 315 shares during the period. 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 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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