December 20, 2025 — Western Digital Corporation (NASDAQ: WDC) is closing out 2025 as one of the market’s most talked-about “infrastructure for AI” plays, with shares hovering around $181 after a volatile, high-volume session that saw the stock trade between roughly $176 and $185.
Behind the move is a rare combination of catalysts hitting at once: Western Digital’s imminent addition to the Nasdaq-100, a fresh wave of Wall Street price-target hikes, and a business narrative increasingly tied to AI data-center storage demand—the kind of “picks-and-shovels” theme investors have chased across tech in 2025. [1]
Below is a detailed roundup of the latest Western Digital stock news, the most current forecasts and analyst outlooks, and the fundamental drivers that matter heading into 2026.
Western Digital stock today: where WDC shares stand on Dec. 20, 2025
With U.S. markets closed on Saturday, the most recent actionable read for investors is Friday’s pricing and liquidity. Western Digital shares were last indicated around $181.08, with about 36.3 million shares traded and an intraday range roughly spanning the mid-$170s to the mid-$180s.
That level matters because it sits near the stock’s recent highs, and it means many “average” Wall Street price targets (which tend to update more slowly) now imply limited upside unless analysts continue lifting their numbers—or the market begins pricing in a longer, stronger storage upcycle. [2]
The headline catalyst: Western Digital joins the Nasdaq-100 on Dec. 22
The single biggest near-term event risk for WDC stock is index inclusion.
Nasdaq has announced the annual reconstitution of the Nasdaq-100 Index, with changes effective prior to market open Monday, December 22, 2025—and Western Digital is among the additions. [3]
Why index inclusion can move WDC stock
Inclusion can matter for two reasons:
- Forced buying from passive funds
Index funds and ETFs that track the Nasdaq-100 (directly or closely) typically must purchase new constituents to stay aligned. Market commentary around this event has emphasized that index inclusion can create a mechanical layer of demand. [4] - Visibility and liquidity
Nasdaq-100 membership can broaden the shareholder base, increase institutional attention, and sometimes reduce “small corner of the market” stigma—especially for companies newly perceived as strategic to a major theme like AI infrastructure. [5]
This doesn’t guarantee higher prices. But it does raise the odds of short-term volatility around the effective date as portfolios rebalance.
Analyst upgrades and price-target hikes: what’s driving the new WDC stock forecasts
The other major story into Dec. 20 is that analysts have been raising targets rapidly, reflecting both better fundamentals and a re-rating tied to AI storage demand.
The latest notable target changes
A sampling of the most widely cited recent moves includes:
- Morgan Stanley raised its price target on Western Digital to $228 from $188 and maintained an Overweight rating (reported via The Fly). [6]
- Cantor Fitzgerald raised its price target to $250 from $200, maintaining an Overweight rating (also via The Fly). [7]
- Benchmark lifted its target to $200 from $163 (Buy). Bank of America raised to $197 (Buy), TD Cowen reiterated a $200 target (Buy), while UBS kept a more cautious stance with a $145 target (Neutral), according to an analyst-ratings roundup. [8]
What analysts are keying on
Across these updates, the consistent themes are:
- Tighter supply and stronger pricing in high-capacity HDDs used by cloud and hyperscale customers
- Longer demand visibility tied to AI data-center buildouts
- Rising margins and cash generation that make buybacks/dividends more credible
These points are also consistent with broader coverage of the “AI-driven demand spike” narrative in storage stocks this year. [9]
The business story behind the stock: Western Digital after the Sandisk separation
A major structural shift often overlooked in day-to-day stock coverage is that Western Digital is no longer the same conglomerate it used to be.
In February 2025, Western Digital announced the successful completion of the planned separation of its Flash business, creating a more focused Western Digital going forward. [10]
Western Digital’s own financial reporting language also reinforces that the separation date in February 2025 changed what is consolidated in results going forward. [11]
For investors, the practical implication is that today’s WDC equity story is increasingly about enterprise and cloud HDD scale, product cycles in high-capacity drives, and the pricing dynamics of data-center storage.
Earnings momentum: what Western Digital reported and what it guided next
Q1 FY2026 results show accelerating profitability
In its fiscal first quarter of 2026 (period ended October 3, 2025), Western Digital reported:
- Revenue: $2.82 billion (up 27% year over year)
- GAAP diluted EPS: $3.07; non-GAAP diluted EPS: $1.78
- Operating cash flow: $672 million; free cash flow: $599 million [12]
Management explicitly tied performance to demand conditions, saying the company was executing well in a strong environment driven by cloud data storage growth, with AI accelerating data creation. [13]
Q2 FY2026 outlook: revenue and margins expected to rise again
For fiscal Q2 2026, the company guided to (midpoint view):
- Revenue: ~$2.9B (± $100M)
- Non-GAAP gross margin: ~44%–45%
- Non-GAAP EPS: ~$1.88 (± $0.15) [14]
That outlook is a key reason why targets have moved: it suggests not only demand strength, but also margin expansion—an especially powerful lever for a storage manufacturer when pricing and mix move in its favor.
FY2025 set the base for the 2026 narrative
Western Digital’s fiscal-year 2025 results (reported July 30, 2025) included:
- FY2025 revenue of $9.52B (up 51% year over year)
- Q4 FY2025 revenue of $2.61B (up 30% year over year)
- Q4 FY2025 operating cash flow $746M; free cash flow $675M [15]
In that same release, the company highlighted steps such as debt reduction, initiating a dividend, and authorizing share repurchases—signals that cash generation was improving meaningfully. [16]
Why AI is bullish for HDDs: the “storage supercycle” framing
The case for Western Digital in 2025 has increasingly hinged on a simple claim: AI creates massive data, and cloud providers need cost-efficient storage at scale.
Reuters coverage earlier in 2025 described Western Digital forecasting upbeat results on strong cloud demand, with AI-related data growth cited as a driver. [17]
Later, Reuters also pointed to a sharp run in storage stocks—Western Digital and peers—amid an “AI-driven demand spike,” reinforcing that investors have increasingly treated data storage as a core AI infrastructure exposure rather than a legacy hardware category. [18]
This narrative has also reached mainstream investing audiences. A Wall Street Journal feature on successful 2025 AI trades highlighted how some investors targeted storage companies like Western Digital rather than only the headline AI semiconductor names. [19]
Dividend and buybacks: shareholder returns are back in focus
Dividend boosted to $0.125 per share
Western Digital increased its quarterly cash dividend by 25% to $0.125 per share, with the company stating it would be paid December 18, 2025 to stockholders of record as of December 4, 2025. [20]
For income investors, the yield is still relatively small at current prices—but the signal matters: it suggests management confidence in durability of cash flows.
A $2 billion share repurchase program remains a key lever
Western Digital’s board authorized a new $2.0 billion share repurchase program in May 2025, giving management flexibility to return capital through open-market or privately negotiated repurchases. [21]
Some market commentary around WDC has also pointed to completed repurchase activity (including a tranche described as 9.2 million shares for about $702 million), underscoring that buybacks have been more than theoretical. [22]
Western Digital stock forecast for 2026: consensus targets vs. today’s price
One reason WDC is such a divisive stock right now is that, after a massive rally, consensus targets don’t all look “cheap” anymore—yet bullish analysts argue the cycle is still early.
What price target aggregators show (as of mid-to-late December 2025)
- MarketBeat’s compiled view shows an average target around $173.65, with a wide range up to $250 on the high end. [23]
- TipRanks shows an average target around $188.21, also with highs reaching $250 and lows around $135. [24]
- A Nasdaq-hosted item referencing Morgan Stanley’s coverage summarizes an average one-year target near $182 (as of early December) with a broad forecast range. [25]
With WDC trading around $181, these numbers illustrate the current setup:
- The middle of the Street increasingly prices the stock as “fairly valued” after the surge.
- The bull case depends on continued upward earnings revisions, sustained tight supply, and AI-driven demand visibility persisting into 2026–2027. [26]
Citi’s longer-term demand framing
One of the more attention-grabbing bullish arguments came from Citi commentary highlighting hard-drive makers as potential AI winners, with enterprise HDD demand projected to grow at a ~20% annual rate through 2029 (as summarized by Barron’s). [27]
Investors should note: long-duration demand forecasts can be sensitive to cloud capex cycles and technology shifts. Still, this is the type of long-run assumption that can justify higher targets even after a big run.
The risks investors are debating right now
Even bulls concede that Western Digital stock is no longer an “ignored” name—and that changes the risk profile.
Key risks commonly cited across market coverage include:
- Cycle risk / capex timing: If hyperscalers slow data-center builds or defer storage purchases, HDD demand can soften quickly. [28]
- Competition and substitution: SSD adoption continues to expand in many performance-heavy workloads, even if HDDs keep an edge on cost-per-terabyte for large-scale storage. [29]
- Valuation compression after a surge: When a stock is up multiples in a year, “good” results may be less impactful than “perfect” results—especially if guidance ever flattens. [30]
- Event-driven volatility: Nasdaq-100 inclusion can cause short-term flows in both directions (pre-positioning vs. rebalancing). [31]
Key dates to watch next for WDC stock
- Dec. 22, 2025: Western Digital’s Nasdaq-100 inclusion becomes effective before the open. [32]
- Next earnings window (Q2 FY2026): The company has not clearly confirmed a date in the sources above, but market calendars commonly point to late January or early February 2026; Zacks currently lists Feb. 4, 2026 as an expected release date. [33]
Bottom line: why Western Digital remains in focus on Dec. 20, 2025
As of Dec. 20, Western Digital stock sits at the intersection of three powerful forces:
- Index-driven demand (Nasdaq-100 inclusion on Dec. 22) [34]
- A cascade of analyst target hikes (including targets now stretching as high as $228–$250 from major firms) [35]
- Fundamental acceleration (rising margins, strong cash flow, and guidance pointing higher) [36]
References
1. ir.nasdaq.com, 2. www.marketbeat.com, 3. ir.nasdaq.com, 4. finance.yahoo.com, 5. www.nasdaq.com, 6. www.tipranks.com, 7. www.tipranks.com, 8. www.investing.com, 9. www.reuters.com, 10. www.westerndigital.com, 11. www.westerndigital.com, 12. www.westerndigital.com, 13. www.westerndigital.com, 14. www.westerndigital.com, 15. www.westerndigital.com, 16. www.westerndigital.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.wsj.com, 20. www.westerndigital.com, 21. www.westerndigital.com, 22. finance.yahoo.com, 23. www.marketbeat.com, 24. www.tipranks.com, 25. www.nasdaq.com, 26. www.westerndigital.com, 27. www.barrons.com, 28. www.reuters.com, 29. www.barrons.com, 30. www.marketbeat.com, 31. ir.nasdaq.com, 32. ir.nasdaq.com, 33. www.zacks.com, 34. ir.nasdaq.com, 35. www.tipranks.com, 36. www.westerndigital.com
