Western Digital (NASDAQ:WDC) Trading Up 15.8% - Still a Buy?

Key Points

• Western Digital shares jumped 15.8% to about $535 as memory stocks rallied on tighter supply, improving industry fundamentals and strong AI-driven demand for data-center storage.
• Analysts remain bullish, with recent price-target increases from Citi, Melius Research, JPMorgan and Mizuho; MarketBeat’s consensus rating is “Moderate Buy,” despite the stock trading above its average $520.32 target.
• Aug. 5 earnings are the next major catalyst. Investors will look for evidence that AI demand is supporting sustainable pricing, margins and guidance, while China-related competition remains a key risk.

Shares of Western Digital Corporation (NASDAQ:WDC - Get Free Report) were up 15.8% during trading on Thursday . The stock traded as high as $538.43 and last traded at $535.0280. 1,862,114 shares changed hands during mid-day trading, a decline of 79% from the average daily volume of 8,871,471 shares. The stock had previously closed at $462.04.

Key Headlines Impacting Western Digital

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

• Positive Sentiment: Memory stocks, including Western Digital, SanDisk, Micron and Seagate, are rallying as improving industry fundamentals and tighter supply support expectations for stronger revenue and margins. Memory Stocks Blast Off
• Positive Sentiment: Western Digital’s high-capacity hard drives are benefiting from growing AI-generated data and cloud-storage demand. Commentary on Seagate’s results also provided a read-through supporting demand and tighter supply for WDC. Seagate, SK Hynix, Ford, Vertiv, and More Stocks
• Positive Sentiment: Analyst commentary remains supportive, with Wedbush and other firms raising or maintaining bullish targets for AI-storage suppliers. The optimism suggests the recent selloff may have outpaced deterioration in Western Digital’s underlying business. Wedbush Raises the Bar for Two AI Storage Stocks
• Neutral Sentiment: Western Digital’s Aug. 5 earnings report is the next major catalyst. Investors will assess whether AI-related demand is translating into sustainable pricing, margins and guidance after the company’s prior quarter exceeded earnings and revenue expectations. Western Digital’s Earnings Will Test Whether Its AI Rally Has More Room
• Negative Sentiment: China-related competition remains a risk. The successful IPO of ChangXin Memory Technologies and advances in Chinese AI technology have raised concerns about future competition and the durability of the current memory-supply shortage. Micron Stock Fell on China Worries
• Negative Sentiment: Insider Cynthia Tregillis sold 808 WDC shares for roughly $428,000 under a pre-arranged Rule 10b5-1 plan. The sale reduced her position by only 0.7%, making it a limited negative signal. Cynthia Tregillis Sells Western Digital Shares

Analyst Upgrades and Downgrades

Several research analysts recently issued reports on the stock. Citigroup increased their price target on shares of Western Digital from $685.00 to $800.00 and gave the stock a "buy" rating in a report on Monday, July 13th. Melius Research set a $1,050.00 target price on Western Digital and gave the stock a "buy" rating in a research note on Monday, June 29th. Evercore restated an "outperform" rating and issued a $575.00 price target on shares of Western Digital in a research note on Tuesday, May 26th. JPMorgan Chase & Co. upped their price objective on Western Digital from $530.00 to $650.00 and gave the stock an "overweight" rating in a report on Friday, June 12th. Finally, Mizuho increased their price objective on Western Digital from $550.00 to $685.00 and gave the stock an "outperform" rating in a research report on Monday, June 8th. Two research analysts have rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and four have assigned a Hold rating to the company's stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average price target of $520.32.

Western Digital Stock Up 14.3%

The firm has a fifty day moving average of $565.89 and a 200-day moving average of $404.28. The stock has a market capitalization of $182.03 billion, a price-to-earnings ratio of 31.62 and a beta of 2.11.

Western Digital (NASDAQ:WDC - Get Free Report) last released its quarterly earnings results on Thursday, April 30th. The data storage provider reported $2.72 earnings per share for the quarter, topping analysts' consensus estimates of $2.39 by $0.33. The company had revenue of $3.34 billion during the quarter, compared to analysts' expectations of $3.25 billion. Western Digital had a return on equity of 42.95% and a net margin of 55.29%.The business's revenue for the quarter was up 45.5% compared to the same quarter last year. During the same period in the previous year, the firm posted $1.36 earnings per share. As a group, research analysts forecast that Western Digital Corporation will post 9.61 EPS for the current fiscal year.

Insider Activity

In other news, Director Bruce E. Kiddoo sold 750 shares of the firm's stock in a transaction on Thursday, May 28th. The stock was sold at an average price of $528.52, for a total transaction of $396,390.00. Following the sale, the director owned 3,903 shares in the company, valued at $2,062,813.56. This trade represents a 16.12% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, insider Cynthia L. Tregillis sold 808 shares of the stock in a transaction dated Tuesday, July 21st. The stock was sold at an average price of $529.63, for a total transaction of $427,941.04. Following the transaction, the insider owned 114,539 shares in the company, valued at approximately $60,663,290.57. The trade was a 0.70% 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. Insiders have sold a total of 29,767 shares of company stock worth $13,059,607 in the last three months. 0.18% of the stock is owned by insiders.

Institutional Trading of Western Digital

Several institutional investors have recently made changes to their positions in WDC. Ares Financial Consulting LLC grew its holdings in shares of Western Digital by 45.5% during the 2nd quarter. Ares Financial Consulting LLC now owns 80 shares of the data storage provider's stock worth $51,000 after purchasing an additional 25 shares during the period. Dogwood Wealth Management LLC increased its stake in shares of Western Digital by 28.6% in the second quarter. Dogwood Wealth Management LLC now owns 90 shares of the data storage provider's stock worth $57,000 after buying an additional 20 shares during the last quarter. Valley Wealth Managers Inc. acquired a new position in Western Digital during the 1st quarter worth $32,000. IMG Wealth Management Inc. increased its position in shares of Western Digital by 853.8% in the 1st quarter. IMG Wealth Management Inc. now owns 124 shares of the data storage provider's stock worth $34,000 after purchasing an additional 111 shares during the last quarter. Finally, Catalyst Capital Advisors LLC acquired a new stake in shares of Western Digital in the 1st quarter valued at about $35,000. 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.

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