Western Digital (NASDAQ:WDC) Shares Down 4.6% - What's Next?

Key Points

• Western Digital shares fell 4.6% in midday trading, with heavier-than-normal volume as the stock came under pressure amid a broader selloff in memory-chip and AI-related names after SK Hynix’s warning.
• Despite the pullback, analysts remain broadly bullish on the company, pointing to strong AI-driven storage demand and tight HDD supply; several firms recently raised price targets, including one to $650.
• Western Digital’s recent fundamentals were strong: the company beat quarterly EPS and revenue estimates, lifted its dividend, and is heading toward its next earnings report with Wall Street expecting a large year-over-year profit increase.

Western Digital Corporation (NASDAQ:WDC - Get Free Report)'s stock price fell 4.6% during mid-day trading on Monday . The company traded as low as $532.16 and last traded at $555.55. Approximately 4,741,969 shares changed hands during trading, a decline of 48% from the average session volume of 9,052,958 shares. The stock had previously closed at $582.59.

Key Stories Impacting Western Digital

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

• Positive Sentiment: Analysts remain constructive on Western Digital, citing strong AI-driven storage demand and tight hard-disk-drive supply conditions; one note reiterated an Overweight rating and lifted its price target to $650. Why Western Digital (WDC) Is Benefiting From AI-Driven Storage Demand and Tight HDD Supply Conditions
• Positive Sentiment: Another report said analysts are betting Western Digital can gain further from here because demand remains strong, which supports the longer-term bull case. Why Analysts Are Betting Western Digital Stock Can Gain Another 30% from Here
• Neutral Sentiment: Western Digital is also approaching its next earnings report, and Wall Street is expecting a large year-over-year profit increase, which could become a major catalyst if results and guidance impress. Western Digital's Quarterly Earnings Preview: What You Need to Know
• Negative Sentiment: Near-term trading is being pressured by a sector-wide memory-chip selloff after SK Hynix warned on profits and its shares reversed sharply, dragging Micron, SanDisk, and Western Digital lower in sympathy. Western Digital Stock Drops: Why an Aggressive SK Hynix Reversal Is Shaking Up the Chip Sector
• Negative Sentiment: Broader market headlines also point to weakness in global chip stocks and AI-related names, adding to pressure on Western Digital shares. SK Hynix’s record plunge drags down global chip stocks

Wall Street Analysts Forecast Growth

A number of equities analysts have recently commented on WDC shares. Sanford C. Bernstein upgraded shares of Western Digital from a "market perform" rating to an "outperform" rating and set a $340.00 price objective for the company in a research report on Tuesday, March 31st. Barclays raised their price target on shares of Western Digital from $450.00 to $620.00 and gave the company an "overweight" rating in a report on Wednesday, May 27th. Melius Research set a $1,050.00 price target on shares of Western Digital and gave the company a "buy" rating in a research report on Monday, June 29th. Morgan Stanley lifted their price objective on Western Digital from $488.00 to $650.00 and gave the company an "overweight" rating in a research note on Monday, June 15th. Finally, Evercore reiterated an "outperform" rating and set a $575.00 price target on shares of Western Digital in a research report on Tuesday, May 26th. Two research analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and four have given a Hold rating to the company. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $520.32.

Western Digital Stock Performance

The firm has a 50-day moving average of $555.90 and a 200-day moving average of $374.22. The firm has a market capitalization of $191.46 billion, a P/E ratio of 33.16 and a beta of 2.11.

Western Digital (NASDAQ:WDC - Get Free Report) last issued its quarterly earnings data on Thursday, April 30th. The data storage provider reported $2.72 EPS for the quarter, beating the consensus estimate of $2.39 by $0.33. Western Digital had a net margin of 55.29% and a return on equity of 42.95%. The firm had revenue of $3.34 billion during the quarter, compared to the consensus estimate of $3.25 billion. During the same period in the prior year, the firm posted $1.36 earnings per share. The company's quarterly revenue was up 45.5% compared to the same quarter last year. Western Digital has set its Q4 2026 guidance at 3.100-3.400 EPS. Equities analysts anticipate that Western Digital Corporation will post 9.6 EPS for the current fiscal year.

Western Digital Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Wednesday, June 17th. Shareholders of record on Friday, June 5th were issued a $0.15 dividend. This represents a $0.60 annualized dividend and a yield of 0.1%. This is a positive change from Western Digital's previous quarterly dividend of $0.12. The ex-dividend date of this dividend was Friday, June 5th. Western Digital's dividend payout ratio is presently 3.58%.

Insider Activity

In other news, insider Cynthia L. Tregillis sold 432 shares of the firm's stock in a transaction dated Friday, June 5th. The shares were sold at an average price of $545.60, for a total transaction of $235,699.20. Following the sale, the insider owned 116,643 shares of the company's stock, valued at $63,640,420.80. This trade represents a 0.37% 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, Director Bruce E. Kiddoo sold 750 shares of Western Digital stock in a transaction on Thursday, May 28th. The stock was sold at an average price of $528.52, for a total value of $396,390.00. Following the completion of the sale, the director directly owned 3,903 shares of the company's stock, valued at $2,062,813.56. The trade was a 16.12% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have sold 29,322 shares of company stock worth $12,768,550. 0.18% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its position in shares of Western Digital by 7.7% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 41,988 shares of the data storage provider's stock valued at $1,698,000 after purchasing an additional 3,019 shares in the last quarter. Geneos Wealth Management Inc. increased its stake in Western Digital by 229.7% in the 1st quarter. Geneos Wealth Management Inc. now owns 1,388 shares of the data storage provider's stock worth $56,000 after acquiring an additional 967 shares during the last quarter. Sivia Capital Partners LLC purchased a new stake in shares of Western Digital during the 2nd quarter worth approximately $307,000. Cresset Asset Management LLC bought a new position in shares of Western Digital during the 2nd quarter valued at approximately $292,000. Finally, Federated Hermes Inc. grew its holdings in shares of Western Digital by 55.3% in the second quarter. Federated Hermes Inc. now owns 2,374 shares of the data storage provider's stock valued at $152,000 after purchasing an additional 845 shares in the last quarter. Hedge funds and other institutional investors own 92.51% of the company's stock.

About Western Digital

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.

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