Key Stats for Western Digital Stock
- Past-Week Performance: 16%
- 52-Week Range: $56 to $603
- Valuation Model Target Price: Around $640
- Implied Upside: Roughly Flat
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What Happened?
Western Digital Corporation stock rose about 16% today, recently trading near $654 per share after breaking above its prior 52-week high. The move extended a sharp rally in AI-related storage stocks as investors continued to price in stronger demand for high-capacity hard drives, which cloud and data center customers use to store massive amounts of AI-generated data.
The stock moved higher because Wall Street is raising earnings expectations for Western Digital as AI data growth tightens HDD supply, supports better pricing, and improves margins. The company recently reported fiscal Q3 revenue of $3.34 billion, up 45% year over year, with non-GAAP EPS of $2.72 versus estimates of about $2.40. Management also guided for fiscal Q4 revenue growth of 36% to 44% year over year and non-GAAP gross margin of 51% to 52%, reinforcing the view that stronger HDD pricing can keep flowing through to profits.
This week at the Evercore Global TMT Conference, Western Digital CFO Kris Sennesael said the company has “high conviction that exabyte demand will grow more than 25% annually over the next 3 to 5 years”, driven by cloud growth, AI training, inference, and emerging physical AI workloads. He said roughly 80% of hyperscaler data is stored on HDDs, Western Digital is shipping 32-terabyte drives in high volume, average ASP per terabyte rose 9% year over year last quarter, gross margins have already moved above 50%, and incremental gross margins are running in the 70% to 75% range.
Analyst actions added more fuel to the move. JPMorgan raised its Western Digital price target to $650 from $530 and kept an Overweight rating, while Mizuho lifted its target to $685 from $550 and maintained an Outperform rating. The rally also fit the broader AI storage trade, with Seagate as Western Digital’s closest public hard-drive peer, Micron benefiting from AI memory demand, and SanDisk tied more directly to NAND and flash storage after its separation from Western Digital. Seagate recently reported fiscal Q3 revenue of $3.11 billion and a 47% non-GAAP gross margin, while Western Digital’s 45% revenue growth, higher HDD pricing, and cleaner post-SanDisk business gave investors a stronger earnings story for 2026.
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Is Western Digital Fairly Valued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): Around 35%
- Operating Margins: Around 43%
- Exit P/E Multiple: 20x
Western Digital’s revenue outlook reflects a sharp rebound from the storage downturn, with AI data growth, cloud storage demand, and tighter hard drive supply supporting faster sales growth this year.
The 35% revenue growth assumption depends on hyperscale cloud customers continuing to expand high-capacity HDD purchases, because AI training, inference, video, logs, and enterprise data all require cheaper mass storage beyond GPUs and high-bandwidth memory.
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The 43% operating margin assumption depends on pricing staying firm as supply remains tight, because higher-capacity drives give customers better storage density while helping Western Digital lower cost per terabyte.
The SanDisk separation also gives Western Digital a cleaner focus on enterprise hard drives and cloud storage instead of splitting attention across flash and HDD markets.
Based on these inputs, the model estimates a target price of around $640, which is about 2% below the recent share price, indicating Western Digital looks fairly valued after its sharp rally.
At current levels, Western Digital’s next move likely depends less on multiple expansion and more on whether AI storage demand, HDD pricing, and cloud customer orders can keep earnings growth strong enough to justify the stock’s higher valuation.
How Much Upside Does Western Digital Corporation Stock Have From Here?
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- Revenue Growth
- Operating Margins
- Exit P/E Multiple
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