Western Digital (NASDAQ:WDC) Shares Up 4.4% - Here's Why

Key Points

• Western Digital shares rose 4.4% as optimism about sustained flash-memory demand and AI-driven infrastructure spending lifted the broader storage sector.
• The company reported a strong quarter, with EPS of $3.56 beating estimates and revenue increasing 43.8% year over year to $3.75 billion. Analysts remain broadly bullish, with a “Moderate Buy” consensus and several firms raising price targets.
• Risks include elevated investor expectations, potential NAND pricing volatility and insider selling, including CEO Irving Tan’s $8.9 million sale under a pre-arranged trading plan.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares shot up 4.4% on Friday . The company traded as high as $516.35 and last traded at $508.80. 9,852,246 shares traded hands during mid-day trading, an increase of 10% from the average session volume of 8,933,262 shares. The stock had previously closed at $487.29.

Western Digital News Summary

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

• Positive Sentiment: Sector rally supports WDC. SanDisk’s bullish long-term growth targets, including expectations for sustained flash-memory demand, boosted sentiment toward storage companies. Western Digital benefited from the read-through, particularly as investors anticipate continued AI infrastructure spending on HDD and NAND storage. SanDisk outlook article
• Positive Sentiment: Analyst and quantitative signals improved. Zacks upgraded Western Digital to Rank #1, or “Strong Buy,” citing improving earnings prospects. WDC was also included among Zacks’ top momentum stocks, while JPMorgan reportedly raised its price target to $650. Zacks upgrade article
• Positive Sentiment: Recent results provide fundamental support. Western Digital’s latest quarter exceeded consensus estimates for both earnings and revenue, with revenue rising 43.8% year over year. Stronger pricing, high-capacity drive demand and AI-driven storage requirements are supporting expectations for continued growth. WDC sector rally article
• Neutral Sentiment: Institutional positioning is mixed: JPMorgan and Capital World Investors added shares, while several large investors reduced holdings. The conflicting activity does not establish a clear institutional trend.
• Negative Sentiment: Elevated expectations remain a risk. Despite the earnings beat, WDC shares previously fell sharply because management’s guidance did not exceed demanding investor expectations. Concerns remain about moderating sequential growth, NAND pricing volatility and whether the AI-driven storage cycle has peaked. WDC earnings reaction article
• Negative Sentiment: Insider selling may weigh on sentiment. CEO Irving Tan sold 20,000 shares for approximately $8.9 million under a pre-arranged Rule 10b5-1 plan. Broader data shows substantial insider selling and no reported insider purchases during the past six months. CEO insider sale article

Analysts Set New Price Targets

Several analysts have recently commented on the company. Wells Fargo & Company raised their price target on Western Digital from $575.00 to $730.00 and gave the company an "overweight" rating in a report on Friday, July 10th. Bank of America upped their price target on shares of Western Digital from $610.00 to $732.00 and gave the stock a "buy" rating in a research note on Wednesday, July 1st. Weiss Ratings cut shares of Western Digital from a "buy (b)" rating to a "buy (b-)" rating in a research note on Tuesday. Morgan Stanley reissued an "overweight" rating and set a $676.00 price objective on shares of Western Digital in a report on Thursday, August 6th. Finally, Rosenblatt Securities dropped their target price on shares of Western Digital from $900.00 to $800.00 and set a "buy" rating for the company in a report on Thursday, August 6th. Two analysts have rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and five have assigned a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $534.56.

Western Digital Trading Up 4.4%

The stock has a market capitalization of $175.37 billion, a price-to-earnings ratio of 21.02 and a beta of 2.14. The stock's 50 day moving average is $556.39 and its 200 day moving average is $424.88.

Western Digital (NASDAQ:WDC - Get Free Report) last issued its quarterly earnings data on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share for the quarter, topping 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 business had revenue of $3.75 billion during the quarter, compared to analysts' expectations of $3.70 billion. During the same period last year, the company 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. On average, sell-side analysts anticipate that Western Digital Corporation will post 19.65 EPS for the current year.

Western Digital Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 17th. Shareholders of record on Tuesday, September 8th will be issued a $0.15 dividend. This represents a $0.60 dividend on an annualized basis and a yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital's dividend payout ratio is 2.48%.

Insiders Place Their Bets

In other Western Digital news, Director Bruce E. Kiddoo sold 750 shares of the stock in a transaction that occurred on Thursday, May 28th. The shares were sold at an average price of $528.52, for a total value of $396,390.00. Following the completion of the sale, the director owned 3,903 shares of the company's stock, valued at $2,062,813.56. This trade represents a 16.12% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Irving Tan sold 20,000 shares of the company's stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the completion of the transaction, the chief executive officer owned 575,966 shares of the company's stock, valued at $256,287,591.02. This trade represents a 3.36% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 25,093 shares of company stock worth $11,650,737 over the last ninety days. Company insiders own 0.18% of the company's stock.

Institutional Trading of Western Digital

Hedge funds and other institutional investors have recently modified their holdings of the business. Handelsbanken Fonder AB grew its position in Western Digital by 71.4% in the second quarter. Handelsbanken Fonder AB now owns 230,578 shares of the data storage provider's stock worth $147,275,000 after buying an additional 96,078 shares during the last quarter. China Universal Asset Management Co. Ltd. acquired a new stake in shares of Western Digital during the 4th quarter valued at $2,270,000. Nomura Asset Management Co. Ltd. boosted its stake in shares of Western Digital by 33.6% during the 4th quarter. Nomura Asset Management Co. Ltd. now owns 1,122,095 shares of the data storage provider's stock worth $193,303,000 after acquiring an additional 282,156 shares in the last quarter. CloudAlpha Capital Management Limited Hong Kong acquired a new position in shares of Western Digital in the 4th quarter worth $20,889,000. Finally, World Investment Advisors grew its holdings in shares of Western Digital by 145.8% in the 4th quarter. World Investment Advisors now owns 5,950 shares of the data storage provider's stock worth $1,025,000 after acquiring an additional 3,529 shares during the last quarter. 92.51% of the stock is owned by hedge funds and other institutional investors.

Western Digital Company Profile

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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