Key Stats for Western Digital Stock
- Past-Week Performance: 17%
- 52-Week Range: $73 to $800
- Valuation Model Target Price: Around $660
- Implied Upside: Around 30%
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What Happened?
Western Digital stock rose about 17% over the past five trading days to $509 per share, including a 7% jump Thursday and another 4% gain Friday, as investors returned to storage stocks following the sharp post-earnings selloff. Western Digital sells high-capacity hard disk drives, or HDDs, that hyperscale data centers use to store enormous amounts of information economically, putting it directly against Seagate, while Sandisk and Micron operate across other parts of the broader storage and memory market. The rebound revived the central debate around WDC: whether booming AI data creation can make this hard-drive cycle more durable than previous storage upswings. WDC closed Friday at $508.80, while its 52-week range stood at $73.14 to $799.87.
Western Digital stock rose because Sandisk’s bullish investor-day outlook strengthened confidence that AI-driven data-center storage demand can remain strong, while Western Digital’s own results showed favorable HDD pricing and rapidly improving profitability. Sandisk surged 13.7% Thursday, with Micron, Seagate, and Western Digital also advancing as investors bought storage companies tied to expanding AI infrastructure. Sandisk and Micron primarily sell NAND flash and memory, while Western Digital and Seagate compete directly in high-capacity HDDs, making Seagate the cleaner operating benchmark. Seagate recently reported about $3.6 billion in quarterly revenue, up 48% year over year, with a 52.7% non-GAAP gross margin, versus Western Digital’s $3.75 billion in revenue and 54.4% margin, showing that strong demand and profitability extend across the HDD industry.
Earlier this month, Western Digital reported fiscal Q4 revenue of $3.75 billion, up 44% year over year, while non-GAAP EPS increased 109% to $3.56 and non-GAAP gross margin reached 54.4%, supported by strong exabyte growth and favorable pricing. Cloud revenue reached $3.3 billion, or 89% of total sales, while management guided fiscal Q1 revenue to about $4.1 billion, gross margin to 55% to 56%, and EPS to about $4.00. CEO Irving Tan said “Data creation isn’t slowing, it’s accelerating,” as Western Digital ramps 40TB ePMR drives, which pack more storage onto each disk, and prepares 44TB HAMR drives for the first half of 2027, using heat-assisted recording technology to push capacity even higher.
Wall Street’s post-earnings changes show that analysts remain constructive on the HDD cycle but disagree over how much upside remains after Western Digital’s rally. Baird raised its price target to $630 from $450, Morgan Stanley lifted its target to $676 from $650, and TD Cowen increased its target to $540 from $500, while Goldman Sachs lowered its target to $615 from $650 and UBS cut its target to $525 from $560. The wide range captures the central 2026 debate: Western Digital now needs higher-capacity drives to convert strong AI and cloud demand into faster exabyte growth, continued pricing power, and lower costs so today’s unusually strong margins prove more durable than in previous HDD cycles.
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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 37%
- Exit P/E Multiple: Around 17x
The model assumes around 35% annual revenue growth, which sets a demanding bar and requires hyperscalers to keep expanding storage capacity, higher-capacity drives to accelerate exabyte shipments, and favorable pricing to persist.
The roughly 37% operating-margin assumption looks more defensible because Western Digital already delivered a 37.3% non-GAAP operating margin in fiscal 2026, while higher-capacity drives give the company a path to sell more terabytes from each drive without manufacturing costs increasing at the same pace.
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Management said cost per terabyte declined 8% year over year in Q4 and expects roughly 10% annual declines over the mid-to-long term, while exabyte demand is expected to grow more than 25% over time as 40TB ePMR drives ramp and 44TB HAMR products follow. These improvements matter because Western Digital can grow storage capacity faster than physical drive volumes, supporting margins even without a proportional increase in unit production.
Based on these assumptions, the TIKR model estimates a target price of around $660, implying around 30% total upside from Western Digital’s roughly $509 share price over nearly three years. That return potential is meaningful, but the model still requires unusually strong revenue growth to persist.
At current levels, Western Digital looks closer to fairly valued than clearly undervalued, with the clearest path to outperforming the model coming from sustained hyperscaler demand, faster adoption of higher-capacity HDDs, disciplined pricing, and falling cost per terabyte extending the earnings cycle longer than investors expect.
How Much Upside Does WDC Stock Have From Here?
Investors can estimate Western Digital’s potential share price, or what any stock could be worth, in under a minute using TIKR’s New Valuation Model tool.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
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