Western Digital (NASDAQ:WDC) Trading Down 6.9% - Time to Sell?

Key Points

• Western Digital shares fell 6.9% to $462.09 amid a broader sell-off in AI and memory stocks, rising Treasury yields, and concerns that the company’s elevated valuation may already reflect strong AI-driven growth.
• The underlying quarter was strong: revenue increased 43.8% year over year to $3.75 billion, while adjusted EPS of $3.56 exceeded estimates of $3.31. Management issued first-quarter fiscal 2027 EPS guidance of $3.85–$4.15.
• Analysts remain broadly positive, with a “Moderate Buy” consensus and an average price target of $534.56, but recent insider selling and the stock’s high volatility suggest investors are seeking further evidence that AI and data-center demand can justify its valuation.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares traded down 6.9% during trading on Wednesday . The stock traded as low as $460.28 and last traded at $462.09. Approximately 6,720,014 shares changed hands during mid-day trading, a decline of 25% from the average session volume of 8,936,073 shares. The stock had previously closed at $496.16.

Trending Headlines about Western Digital

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

• Positive Sentiment: AI-related demand remains a key bullish factor. A reported shortage of storage products, expanding margins and a forecast-beating outlook have supported optimism about Western Digital’s earnings growth. The company’s latest quarter also showed strong momentum, with revenue up 43.8% year over year and earnings exceeding analyst expectations. Is Western Digital Stock an Undervalued AI Stock to Buy?
• Positive Sentiment: Recent earnings-estimate revisions, favorable momentum commentary and a broader memory rally had attracted buyers, suggesting some investors still expect demand from data centers and AI infrastructure to drive higher results. Can Western Digital Run Higher on Rising Earnings Estimates?
• Neutral Sentiment: U.S. opposition to Apple sourcing high-bandwidth memory from Chinese suppliers could redirect some demand toward U.S.-linked storage and memory companies, potentially benefiting Western Digital. However, investors are also questioning whether the stock’s valuation already reflects too much of that upside. Western Digital Could Be 51% Overvalued on Apple China Memory Push
• Negative Sentiment: Rising Treasury yields are pressuring high-growth technology shares, while investors are rotating away from AI hardware following a Wall Street Journal report that raised concerns about undisclosed AI spending commitments. Memory and storage peers, including Micron and SanDisk, also sold off, intensifying pressure on WDC. Higher Rates Test the Memory Boom
• Negative Sentiment: The immediate risk is valuation: after a strong recent rally, analysts and traders may be taking profits and demanding stronger evidence that AI-driven demand can justify the stock’s elevated multiple. Technical selling during the broader technology pullback has added to the decline. What’s Going On With Western Digital Stock Tuesday?

Analysts Set New Price Targets

WDC has been the topic of a number of recent research reports. Barclays increased their target price on Western Digital from $450.00 to $620.00 and gave the company an "overweight" rating in a report on Wednesday, May 27th. Cantor Fitzgerald upped their price target on shares of Western Digital from $660.00 to $900.00 and gave the company an "overweight" rating in a research report on Monday, June 29th. Fox Advisors cut shares of Western Digital from an "overweight" rating to an "equal weight" rating in a research note on Monday, June 22nd. Melius Research set a $1,050.00 price objective on shares of Western Digital and gave the stock a "buy" rating in a report on Monday, June 29th. Finally, Zacks Research upgraded shares of Western Digital from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, May 6th. Two equities research analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $534.56.

Western Digital Stock Down 6.9%

The firm has a 50 day moving average price of $556.08 and a 200 day moving average price of $430.29. The stock has a market cap of $159.27 billion, a P/E ratio of 19.09 and a beta of 2.14.

Western Digital (NASDAQ:WDC - Get Free Report) last announced its quarterly earnings data on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $3.31 by $0.25. The company had revenue of $3.75 billion during the quarter, compared to the consensus estimate of $3.70 billion. Western Digital had a return on equity of 48.15% and a net margin of 72.95%.The firm's revenue was up 43.8% on a year-over-year basis. During the same period in the previous year, the company posted $1.66 EPS. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. 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 disclosed a quarterly dividend, which will be paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th will be paid a $0.15 dividend. The ex-dividend date of this dividend is Tuesday, September 8th. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.1%. Western Digital's dividend payout ratio is 2.48%.

Insider Activity

In related news, insider Vidyadhara K. Gubbi sold 2,475 shares of the company's stock in a transaction on Monday, June 1st. The shares were sold at an average price of $556.24, for a total value of $1,376,694.00. Following the completion of the transaction, the insider owned 85,154 shares of the company's stock, valued at approximately $47,366,060.96. This represents a 2.82% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. Also, CEO Irving Tan sold 20,000 shares of the stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total value of $8,899,400.00. Following the completion of the sale, the chief executive officer owned 575,966 shares of the company's stock, valued at $256,287,591.02. The trade was a 3.36% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 25,093 shares of company stock valued at $11,650,737 over the last 90 days. Company insiders own 0.18% of the company's stock.

Institutional Trading of Western Digital

Institutional investors have recently made changes to their positions in the business. Rakuten Securities Inc. boosted its stake in Western Digital by 4,070.0% in the 2nd quarter. Rakuten Securities Inc. now owns 417 shares of the data storage provider's stock worth $27,000 after purchasing an additional 407 shares during the period. Mowery & Schoenfeld Wealth Management LLC bought a new stake in shares of Western Digital during the second quarter valued at approximately $28,000. Dunhill Financial LLC bought a new stake in shares of Western Digital during the second quarter valued at approximately $29,000. Stonehage Fleming Financial Services Holdings Ltd purchased a new position in shares of Western Digital in the second quarter worth $31,000. Finally, Valley Wealth Managers Inc. purchased a new position in shares of Western Digital in the first quarter worth $32,000. Hedge funds and other institutional investors own 92.51% of the company's stock.

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.

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