Western Digital Corporation (NASDAQ: WDC) is starting the week in the spotlight for a simple reason: today is a structural “index day” for the stock. Western Digital officially joins the Nasdaq-100 effective prior to the market open on Monday, December 22, 2025, placing WDC into one of the most widely tracked large-cap growth benchmarks in the world. [1]
That index inclusion arrives after a powerful year-long rally tied to the AI infrastructure buildout—and alongside a fresh wave of analyst notes that have lifted price targets as high as $250. The result is a stock story that blends short-term flows (index rebalancing) with longer-term fundamentals (cloud demand, high-capacity hard drives, and multi-year visibility).
WDC stock today: volatile trading as Nasdaq-100 membership goes live
In early Monday trading, Western Digital shares were changing hands around $173.93, down about 3.95% on the day, after opening near $186.67 and trading in a wide intraday range (roughly $172.22 to $187.24).
That pullback matters mostly because it highlights how fast sentiment and positioning are moving in late 2025: WDC can rally sharply on upgrades and AI-cycle optimism, then swing lower on profit-taking—even on a day that should be supportive from passive index demand.
Just before today’s rebalance, WDC had closed the prior session at $181.08, and a market wrap published early Monday noted the stock had been up 3.5% in the last trading session and had gained strongly over the prior month. [2]
The headline catalyst: Western Digital enters the Nasdaq-100 on Dec. 22
Nasdaq’s official annual reconstitution announcement confirmed Western Digital (WDC) as one of six additions to the Nasdaq-100, alongside names including Seagate Technology (STX). The change becomes effective before the market opens on Dec. 22, 2025, and is timed around the December “quadruple witching” period. [3]
Why this matters for WDC stock:
- Mechanical buying and rebalancing: Funds and products that track the Nasdaq-100 may need to add WDC to stay aligned with the index.
- Visibility and liquidity: Inclusion often boosts a company’s daily attention in financial media and among institutional allocators.
- Options/derivatives ecosystem: Nasdaq notes the Nasdaq-100 underpins 200+ tracking products with $600+ billion in assets under management globally (including QQQ), plus futures and options linked to the index. [4]
Index inclusion doesn’t change a company’s earnings power overnight—but it can change the stock’s technical set-up, especially around rebalance days when volumes spike and short-term supply/demand gets distorted.
Analyst forecasts and price targets: a December “upgrade cluster” around WDC
One reason WDC keeps popping up in market headlines this month is the pace of upward revisions. In mid-December, several firms published notes re-rating the stock as the AI storage cycle appears to extend further into 2026 and beyond.
Cantor Fitzgerald: target raised to $250
A widely circulated note from Cantor Fitzgerald raised its price target on Western Digital to $250 from $200, reiterating an Overweight stance and framing the call around sustained AI-era infrastructure investment. [5]
Benchmark: target raised to $200, with explicit FY26–FY27 estimates
Benchmark lifted its price target to $200 from $163 and kept a Buy rating. The note pointed to higher fiscal 2026 and 2027 expectations, including an estimate of FY26 EPS of $8.42 and revenue growth expectations (as summarized in the report). [6]
Mizuho: Outperform reiterated, visibility extends into 2027
Mizuho reiterated an Outperform rating and highlighted unusually long demand visibility: purchase orders extending through calendar 2026 with at least one customer reaching into calendar 2027, plus early work on 2027–2029 long-term agreements. The same report also described expectations for 2026 pricing to be flat to up low-single-digit percentage year-over-year and cited rising volumes of high-capacity drive shipments. [7]
Citi (via Barron’s): HDD makers as “real AI winners,” WDC target to $200
A separate Citi view, reported in Barron’s, framed hard-drive vendors—especially the Seagate/Western Digital “duopoly”—as major beneficiaries of AI-driven data retention, and cited a $200 price target for WDC. The same report discussed Citi’s expectation that enterprise HDD demand could grow around 20% annually through 2029. [8]
Morgan Stanley: target lifted to $228 (as reported in market coverage)
Market coverage of analyst activity also reported Morgan Stanley lifting its WDC price target to $228 from $188 and maintaining an “outperform”-style view, contributing to a sharp single-day move in the stock last week. [9]
Important context: Price targets are not guarantees. What matters for investors is why targets moved—visibility into demand, pricing confidence, and evidence that higher-capacity drives are improving margins.
Fundamentals check: what Western Digital last reported, and what management guided
Western Digital’s most recent official earnings update (fiscal Q1 2026, period ended Oct. 3, 2025) is central to the current bull case because it paired higher revenue with improving profitability and cash generation.
Key Q1 FY26 highlights from the company:
- Revenue:$2.82 billion, up 27% year over year
- GAAP diluted EPS:$3.07
- Non-GAAP diluted EPS:$1.78
- Cash flow from operations:$672 million; free cash flow:$599 million [10]
For fiscal Q2 2026, management guided (midpoints):
- Revenue:$2.9B ± $100M
- Non-GAAP gross margin: about 44%–45%
- Non-GAAP EPS:$1.88 ± $0.15 [11]
Western Digital also increased its quarterly dividend by 25% to $0.125 per share, with a cash dividend paid on Dec. 18, 2025 to shareholders of record as of Dec. 4, 2025. [12]
The corporate structure shift investors can’t ignore: WDC is post-Sandisk separation
A crucial detail for anyone comparing “old WDC” to “new WDC” is that the company completed the separation of its Flash business unit into Sandisk Corporation on Feb. 21, 2025. Western Digital’s reporting explains that Sandisk results after the separation date are no longer consolidated into WDC. [13]
That means:
- WDC is increasingly judged as a data-center storage story (especially nearline HDD),
- while Sandisk trades more directly on the flash/NAND cycle—also highly linked to AI workloads. [14]
Why AI keeps pulling storage into the center of the market narrative
The most important macro tailwind for WDC stock is that the AI buildout isn’t just about GPUs. It’s about data creation, retention, and retrieval—and the industry is investing aggressively to expand the infrastructure stack.
A Reuters report on Dec. 19, 2025 found global data-center dealmaking hit a record level through November, totaling nearly $61 billion and surpassing 2024’s record—explicitly tying the surge to AI-driven demand for computing infrastructure. [15]
Meanwhile, investor confidence across the AI “picks-and-shovels” chain got a boost last week after Micron reported strong results amid a memory shortage. Investopedia noted that Western Digital rose about 5% on Dec. 18 alongside other memory/storage names, and highlighted a key takeaway: memory and storage vendors can act as demand “weathervanes” for AI infrastructure spending. [16]
Reuters has also framed the storage rally bluntly: in late October, Reuters reported that Western Digital and Seagate had sharply outperformed in 2025, driven by the “global race” to scale AI infrastructure—and cited analyst commentary pointing to multi-year purchase-order visibility as customers try not to fall short on storage capacity. [17]
The product cycle behind the forecasts: 26TB–32TB shipments now, bigger capacity next
For WDC, the bullish argument isn’t only “AI is big.” It’s that AI changes the storage curve—especially for hyperscalers that need cost-efficient capacity at scale.
From a conference transcript summary published by Investing.com (Goldman Sachs Communicopia + Technology Conference, Sept. 2025), Western Digital outlined:
- A projected 15% to 23% CAGR in exabyte output growth from 2024 to 2028 (base-to-upside case), driven by AI-related demand. [18]
- A roadmap where next-generation EPMR qualifications are targeted for early 2026, with ramp later in 2026, and HAMR qualifications targeted for the latter half of 2026 with volume ramping in early 2027. [19]
In Mizuho-related reporting, Western Digital’s progress is described in very tangible shipment terms: approximately 2.2 million 26TB CMR/32TB UltraSMR drives shipped in the September quarter, with an expectation for 3.0–3.5 million in the December quarter, supporting rising average capacity per drive. [20]
Those specifics matter because the “high-capacity drive adoption” theme shows up repeatedly in WDC’s own guidance language as a driver of profitability.
A related pressure point: SSD and NAND pricing is rising into 2026
Even though Western Digital is now reported as post-flash separation, the broader storage ecosystem still influences buyer behavior—especially the economics of “hot” vs “cold” storage tiers.
Tech hardware coverage in December highlighted sharp NAND cost inflation. Tom’s Hardware reported Kingston commentary that NAND pricing rose 246% versus 1Q25, with expectations that SSD pricing pressure could persist into 2026. [21]
Reasonable inference for investors: If SSD prices rise materially, hyperscalers and enterprises may lean harder on HDDs for bulk data retention where performance isn’t the top constraint—potentially supportive for nearline HDD demand and pricing. (This is an inference based on SSD input-cost trends, not a guaranteed outcome.) [22]
Risks and watch-items for WDC stock (what could break the bull case)
Even with upgrades and index inclusion, Western Digital remains a cyclical hardware name—and the market is pricing in a lot of good news.
Key risks investors are actively debating:
- Cycle risk and “through-cycle” profitability: Memory and hardware cycles can flip quickly from undersupply to oversupply, and analysts continue to warn against valuing cyclical names purely on peak conditions. [23]
- Execution risk on capacity roadmap: The stock’s multiple increasingly assumes continued success moving up the capacity curve and delivering margin leverage from new technologies. [24]
- Concentration and hyperscaler behavior: Several reports emphasize that a small number of large cloud customers drive meaningful demand visibility—helpful when strong, risky if spending shifts. [25]
- Insider selling headlines: Insider sales don’t automatically signal trouble, but they can weigh on sentiment after a major run. Investing.com reported that Western Digital’s Chief of Global Operations sold shares worth about $3.7 million in early December. [26]
Bottom line: what WDC investors should focus on after the Nasdaq-100 “index day”
Western Digital stock enters the Nasdaq-100 today at a moment when the market narrative is unusually aligned: AI is driving infrastructure capex, storage demand is rising, and multiple Wall Street firms have raised targets on expectations that the cycle remains strong into 2026–2027.
But the stock’s Monday volatility is also a reminder that WDC is no longer an “early AI trade.” It’s an already-re-rated infrastructure winner, where future returns may depend less on the existence of AI demand and more on pricing durability, long-term agreements, and consistent execution on higher-capacity drives and margins. [27]
References
1. www.nasdaq.com, 2. www.zacks.com, 3. www.nasdaq.com, 4. www.nasdaq.com, 5. www.tipranks.com, 6. www.investing.com, 7. www.investing.com, 8. www.barrons.com, 9. www.barchart.com, 10. www.westerndigital.com, 11. www.westerndigital.com, 12. www.westerndigital.com, 13. www.westerndigital.com, 14. www.barrons.com, 15. www.reuters.com, 16. www.investopedia.com, 17. www.reuters.com, 18. www.investing.com, 19. www.investing.com, 20. www.investing.com, 21. www.tomshardware.com, 22. www.tomshardware.com, 23. www.investopedia.com, 24. www.investing.com, 25. www.investing.com, 26. www.investing.com, 27. www.investing.com
