Key Stats for Western Digital Stock
- Past-30-Day Performance: 32%
- 52-Week Range: $29 to $308
- Valuation Model Target Price: $427
- Implied Upside: 52%
Value your favorite stocks like Western Digital with 5 years of analysts’ forecasts using TIKR’s new Valuation Model (It’s free) >>>
What Happened?
Western Digital stock surged about 32% in the last 30 days, climbing to roughly $282 per share as investors responded to stronger AI-driven storage demand and a materially improved financial outlook presented at the company’s New York strategy update.
The stock moved higher after management outlined mid-20% nearline exabyte growth expectations over the next three to five years and raised long-term financial targets, signaling faster revenue expansion and margin improvement than previously expected.
That combination of accelerating demand and higher structural profitability expectations drove the recent rally.
CEO Irving Tan said the company has been “singularly focused on driving execution,” highlighting long-term customer agreements extending through calendar 2027 and one through calendar 2028.
That added visibility reinforced confidence that AI training and inference workloads are translating into sustained hyperscale storage demand.
Operational momentum further supported the move. Western Digital shipped 3.5 million units of its 32-terabyte nearline drives last quarter and expects just under 4 million units this quarter, marking one of the fastest high-capacity drive ramps in company history.
Revenue is expected to exceed $12 billion in fiscal 2026, roughly double fiscal 2024 levels, while gross margins are projected in the mid-to-high 40% range and operating margins in the mid-30% range.
The company also strengthened its capital return story. Western Digital has already repurchased $1.5 billion of stock and recently authorized an additional $4 billion buyback program.
Free cash flow margin exceeded 20% in each of the last three quarters, reinforcing the improving profitability profile that fueled the recent rally.
See analysts’ growth forecasts and price targets for Western Digital (It’s free) >>>
Is Western Digital Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 24%
- Operating Margins: 38%
- Exit P/E Multiple: 20x
Revenue growth reflects a strong recovery from the trough, with sales projected to expand from $9.52 billion in fiscal 2025 toward approximately $15.66 billion by fiscal 2027 and continue rising beyond that as AI-related storage demand scales.
The valuation model is realized in 2026, reflecting continued exabyte growth and stable pricing per terabyte.
Analyst expectations also incorporate a more disciplined industry pricing environment compared to prior cycles.
Management described pricing as stable to slightly improving, supported by higher-capacity drive adoption and long-term customer agreements.
Margin expansion is the key earnings driver. As 32-terabyte and 40-terabyte ePMR drives ramp and next-generation HAMR products progress through qualification, cost per terabyte declines while operating leverage improves.
Management’s updated financial framework targets revenue growth above 20% annually over the next three to five years, gross margins above 50%, operating margins above 40%, and free cash flow margins above 30%.
Based on these inputs, the model estimates a target price of $427, implying about 52% upside from current levels.
At roughly $282 per share, Western Digital appears undervalued, with future performance tied to sustained AI-driven storage demand, capacity ramp execution, pricing stability, and continued capital returns rather than cyclical volatility alone.
Estimate a company’s fair value instantly (Free with TIKR) >>>
Value Any Stock in Under 60 Seconds (It’s Free)
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
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.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
