Western Digital Corporation (NASDAQ: WDC) is back in the spotlight on Wednesday, December 17, 2025, as fresh analyst commentary collides with a volatile tape for tech and AI-infrastructure names. Shares pulled back sharply in the latest session—after a powerful multi-month run—yet several research notes published today continue to frame Western Digital as a key beneficiary of AI-driven data growth, with improving pricing visibility, rising drive capacities, and an increasingly shareholder-friendly capital return plan. [1]
Below is what’s driving the conversation around Western Digital stock right now, what analysts are forecasting, and what investors are watching next.
Western Digital stock price action: a sharp pullback after a major run
WDC traded lower on December 17, with real-time quotes showing the stock down about 3%–4% on the day and hovering around the high-$160s.
Intraday data shows just how wide the swings have been: on Dec. 17, WDC opened near $179, touched roughly $181 at the high, and fell as low as about $167, with millions of shares traded. [2]
That volatility matters because today’s analyst updates are landing after what many commentators describe as a dramatic re-rating in 2025—one that has already priced in a significant HDD-cycle recovery and stronger AI-related demand.
The biggest Dec. 17 analyst headlines: Morgan Stanley and Mizuho weigh in
Morgan Stanley: Overweight reiterated, price target lifted to $228
One of the most talked-about notes today: Morgan Stanley reiterated an Overweight rating on Western Digital and raised its price target to $228 from $188, according to a report summary published December 17. [3]
This is a notable step-up in implied upside and underscores how some on Wall Street are modeling a longer-lasting “upcycle” in data-center HDDs—especially as AI workloads expand and cloud providers keep building capacity.
Mizuho: Outperform maintained, $180 target; emphasizes multi-year customer visibility
In a separate Dec. 17 update, Mizuho maintained an Outperform rating and a $180 price target after an investor call with Western Digital’s CFO Kris Sennesael and the VP of IR. [4]
Key takeaways from Mizuho’s note include:
- Customer visibility: Mizuho said Western Digital has purchase orders from its top five customers extending through the end of calendar 2026, with one customer reaching into calendar 2027, and discussions ongoing for 2027–2029 long-term engagements. [5]
- Pricing outlook: 2026 pricing is expected to be flat to up low-single-digit percent year over year, with visibility supported by long-term agreements. [6]
- Capacity ramp details: Mizuho highlighted shipments of about 2.2 million 26TB CMR / 32TB UltraSMR drives in the September quarter, with expectations for 3–3.5 million in the December quarter—supporting higher average drive capacity. [7]
- Balance sheet and SanDisk stake: The note referenced net debt to EBITDA around 0.9x and pointed to plans to monetize Western Digital’s remaining SanDisk stake as part of debt reduction efforts. [8]
- Technology roadmap: Mizuho also discussed a path toward HAMR on glass substrates with partner Hoya, with production ramps expected in the first half of 2027. [9]
The “yes, but” from Morgan Stanley’s broader hardware outlook
Alongside the bullish tone on select names, Morgan Stanley also cautioned (in a separate industry-level commentary) that elevated valuations, a still-inconsistent macro backdrop, and memory cost inflation could narrow hardware outperformance breadth in 2026—even while naming Western Digital among its “top picks.” [10]
That tension—strong company fundamentals vs. a more demanding valuation regime—is a major theme behind WDC’s day-to-day volatility.
Why Western Digital is being treated as an “AI infrastructure” stock
Western Digital’s bull case in late 2025 is increasingly tied to a simple thesis: AI creates more data, and more data requires more storage—particularly low-cost, high-capacity storage at hyperscale.
Reuters has described data-storage firms like Western Digital and Seagate as beneficiaries of “massive demand” for high-capacity hard disk drives, fueled by the AI boom and expanding cloud infrastructure. [11]
Zacks, in a Dec. 17 analysis syndicated on Nasdaq.com, framed the same cycle as a structural opportunity: AI proliferation is driving explosive increases in data creation and storage demand, and Western Digital is aligning its storage portfolio to that reality. [12]
Today’s Zacks/Nasdaq analysis: cash returns rise as operating performance strengthens
A major research-style piece published December 17 emphasizes that Western Digital’s expanded capital allocation signals rising management confidence in the current AI-driven storage cycle. [13]
The article highlights several operating and capital return datapoints from Western Digital’s most recently reported quarter (fiscal Q1 2026):
- Revenue of $2.8 billion, up 27% year over year
- Non-GAAP operating income of $856 million, up 110% year over year, with non-GAAP operating margin at 30.4%
- Disciplined capex of $73 million and cash flow of $599 million for the quarter
- Cash and cash equivalents of about $2.0 billion (as of Oct. 3, 2025)
- Share repurchases of 6.4 million shares for $553 million, plus $39 million in dividends (and $785 million returned since the capital return program launched in fiscal Q4 2025) [14]
In other words: today’s “WDC stock” debate isn’t only about demand—it’s also about how much of the upcycle can translate into sustained margins, free cash flow, and consistent buybacks/dividends.
Western Digital guidance and the dividend story: what changed in late 2025
Western Digital’s dividend trajectory has also become a recurring headline in analyst notes.
Reuters reported on Oct. 30, 2025 that the company raised its quarterly cash dividend by 25% to $0.125 per share and forecast second-quarter earnings above Wall Street estimates, citing cloud providers increasing data-center capacity and higher demand for storage products. [15]
In that same Reuters report, Western Digital projected:
- Revenue of about $2.9 billion (± $100 million) for the next quarter
- Adjusted EPS of about $1.88 (± $0.15) [16]
Those numbers are important context for December 2025 price targets: many upgrades and target hikes assume that pricing and mix improvements can persist long enough to support elevated earnings power.
Forecasts and price targets: where Wall Street is clustering
As of December 17, the market is seeing a wide dispersion of outcomes—typical for cyclical hardware names that can swing meaningfully with pricing and supply.
Here are the most visible “forecast signals” in today’s coverage:
- Morgan Stanley: PT $228, Overweight reiterated. [17]
- Mizuho: PT $180, Outperform maintained, stressing multi-year purchase order visibility and relatively stable pricing expectations into 2026. [18]
- Broader target range: A summary citing 24 analysts put the average target around $182, with a high estimate of $250 and a low estimate of $92. [19]
- Earnings estimate momentum (Zacks): The Zacks consensus estimate for fiscal 2026 earnings is $7.63, described as having been revised upward over the past 60 days (a factor many quant and momentum models treat as supportive). [20]
Separately, another Zacks-branded piece circulated on Dec. 17 described Western Digital shares as up roughly 195% over the past six months, underscoring how quickly sentiment has shifted—and why valuation debates are now front and center. [21]
A key structural change investors still need to remember: WDC is post-SanDisk separation
One reason Western Digital’s financial story looks different in 2025 than it did historically is the company’s major corporate reshaping.
Western Digital announced on February 24, 2025 that it completed the planned separation of its Flash business. [22]
That separated Flash business—SanDisk—also announced it began trading as an independent public company on Nasdaq under ticker SNDK on the same date. [23]
For investors and readers tracking “Western Digital stock” today, the implication is straightforward: WDC is increasingly evaluated as an HDD- and data-center–exposed company, rather than a blended HDD + NAND/Flash story. That can amplify cyclical swings—both upward and downward—depending on the direction of hyperscale orders and HDD pricing.
Other recent developments still in the news cycle
While analyst notes dominated Dec. 17 headlines, a few other items remain part of the near-term narrative:
Nasdaq-100 inclusion is approaching
Reuters reported that Western Digital is among the new entrants to the Nasdaq-100 index, with changes expected to take effect on December 22, 2025. [24]
Index inclusion can matter for flows (passive funds and ETFs) and visibility—though it doesn’t change underlying fundamentals.
Western Digital’s quantum investment grabbed attention
In company news earlier this month, Qolab announced a strategic investment from Western Digital aimed at accelerating next-generation quantum innovation—highlighting Western Digital’s interest in applying its materials science and nanofabrication expertise beyond traditional storage. [25]
This isn’t likely to drive near-term revenue the way HDD pricing does, but it adds color to the company’s R&D posture and long-term optionality.
What to watch next for WDC stock
For the remainder of December and into early 2026, investors will likely focus on a tight set of catalysts and debate points:
- Pricing durability through 2026: Mizuho’s view—flat to slightly higher pricing—suggests a “less boom-and-bust” HDD tape than prior cycles, but that thesis will be tested quarter by quarter. [26]
- Shipment mix and capacity ramps: Updates on high-capacity drive volumes (like the 26TB/32TB figures discussed today) can move sentiment quickly, because they connect directly to margins and customer roadmaps. [27]
- Capital returns vs. balance-sheet priorities: Buybacks and dividends are increasingly part of the WDC story; investors will weigh capital returns against debt reduction and any remaining separation-related financial clean-up. [28]
- Valuation risk in a choppy macro: Even bullish analysts are flagging that elevated valuations and macro uncertainty could narrow upside for hardware in 2026. [29]
- Nasdaq-100 mechanics: Watch for short-term volatility around index reconstitution and positioning, especially after a major rally earlier in 2025. [30]
Bottom line
On December 17, 2025, Western Digital stock is effectively at the intersection of three forces: a powerful AI-storage demand narrative, improving cash-return credibility, and a valuation/volatility hangover after a dramatic run.
Morgan Stanley’s move to a $228 target keeps the bull case loud. Mizuho’s focus on multi-year customer visibility and stable-ish pricing adds fundamental support. Meanwhile, the stock’s sharp intraday swings underline that the market is actively re-pricing how long this upcycle can last—and how much of it is already reflected in the share price. [31]
References
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