New York, June 16, 2026, 05:02 (EDT)
- Western Digital finished Monday at $653.53 after jumping 16.10%. Google Finance data showed the stock was up again in premarket trading Tuesday.
- Morgan Stanley’s Erik Woodring lifted his price target on WDC to $650 from $488, sticking with an Overweight rating.
- Next up for Western Digital is to see if the company’s fiscal fourth-quarter results and outlook support the rally. Investors want to see better HDD pricing and signs of AI-fueled demand.
Western Digital Corporation shares surged Monday, leading the S&P 500 as buyers piled into storage names with links to AI infrastructure. WDC finished at $653.53 for a gain of 16.10% after touching $658.80 in the session. Google Finance pegged its market cap at about $225 billion, with a price-to-earnings ratio of 39.03. A P/E ratio tracks share price against earnings per share; higher readings signal investors are paying up for future growth.
Morgan Stanley set things off with a bullish new note. Analyst Woodring bumped his price target to $650 from $488 and kept an Overweight rating, pointing to strong nearline enterprise storage demand, faster pricing, margin gains and improved operating leverage. Nearline enterprise storage refers to high-capacity drives for cloud and data-center users who need data accessible but not on the fastest storage. Benzinga said Morgan Stanley also hiked its earnings targets for Western Digital for fiscal 2027 and 2028 to $22.40 and $43.47 per share.
Pricing power is a key issue for the stock. HDDs are still needed for holding big amounts of cloud and AI data at a lower cost. Morgan Stanley expects HDD demand to go up 40% to 50% a year, outpacing supply growth of 30% to 35%, and sees shortages sticking around, MarketWatch reported. NAND flash prices have been rising too—NAND is the solid-state memory in SSDs and other faster storage—and higher NAND prices can push users to choose HDDs for large storage needs.
Western Digital posted numbers that back up the bulls for now. For its fiscal third quarter, reported April 30, the company said revenue rose 45% from a year ago to $3.34 billion. Non-GAAP gross margin came in at 50.5%. Non-GAAP diluted EPS was $2.72. These non-GAAP figures strip out some items and are commonly watched by analysts. CEO Irving Tan said every AI workload “creates data that is stored persistently and cost-efficiently on HDDs.” Western Digital Corporation
WDC may have priced in much of its recent good news, with the stock now close to its 52-week high of $658.80 and well above its 52-week low of $56.26. The average 12-month analyst target from Google Finance is $565.94, which is under Monday’s close. Their analyst snapshot has 14 buy ratings, 2 holds, no sells out of 16 analysts. That gap doesn’t mean the rally has to stop here, but the valuation risk is clear: if HDD prices drop, AI storage orders lose steam, or margins fall short, the stock’s recent momentum could quickly reverse.
Western Digital’s next fiscal fourth-quarter results are what investors are waiting for now, along with the company’s forecast for the following quarter. Management’s previous guidance called for fiscal Q4 revenue of $3.65 billion, plus or minus $100 million, with non-GAAP gross margin of 51% to 52% and non-GAAP EPS at $3.25, plus or minus $0.15. WDC is mainly interesting at this point for those betting the AI storage shortage will persist and support higher HDD prices. After the rally on Monday, the shares look expensive and carry risk for buyers stepping in now.
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