San Francisco, June 25, 2026, 05:00 PDT
- Key points:
- Western Digital Corporation (NASDAQ:WDC) slipped. The stock pulled back after a strong multi-week run tied to AI storage demand.
- Micron Technology’s earnings came into focus as investors looked for new signs on enterprise storage demand.
- Analysts are still flagging a supply shortfall in hard disks, saying this could keep prices supported through 2027.
Western Digital Corporation (NASDAQ:WDC) shares dropped Wednesday, giving back some gains from earlier this month. The stock was down roughly 4% in the session after opening close to $658, according to Google Finance. Volume stayed above its recent average. The market is still watching artificial intelligence infrastructure and enterprise storage demand.
Western Digital shares slipped less than two weeks after a run that put it near the top of the S&P 500. Analysts had upgraded the stock on bets that supply for hard-disk drives can’t keep up with rising demand as cloud firms roll out more AI data centers.
Investors look to be pushing on how far expectations can go higher. Storage stocks lost ground ahead of Micron Technology (NASDAQ:MU) earnings, a report investors often treat as a signal for AI infrastructure budgets and the need for memory chips. Financial media noted wider losses among storage plays before Micron’s results.
Supply is still an undercovered angle for this trade. Morgan Stanley’s Erik Woodring says HDD demand is running 40% to 50% a year, but supply’s only growing 30% to 35%. That gap could keep shortages going for years. Woodring bumped his Western Digital target to $650 and stayed overweight. Targets also went up recently at JPMorgan, Mizuho, and BofA.
Western Digital CEO Irving Tan told investors the business has rare visibility into its pipeline. On the company’s fiscal Q2 earnings call earlier this year, Tan said the company was “pretty much sold out for calendar 2026” and already has long-term deals that cover parts of 2027 and 2028 demand. Tom’s Hardware
This is a shift from earlier storage cycles, where suppliers often faced uncertainty beyond a couple quarters. Now, analysts say hyperscale cloud operators are locking in storage needs sooner as AI apps demand large, persistent data in addition to GPUs.
Western Digital shares jumped more than 16% in one day on June 15 after Morgan Stanley upgraded the stock, a sharp move that has pushed the company well ahead of many tech peers over the last year. Investors are left questioning how much pricing power is already priced in.
Seagate Technology Holdings (NASDAQ:STX) is also riding the AI storage cycle. Analysts see both Seagate and Western Digital gaining if data-center buildouts keep growing. In trading, investors have shifted between Seagate and Western Digital shares, with each stock leading on different days. The market is looking at them as AI storage bets now, rather than traditional PC hardware stocks.
