Key Takeaways
- WDC surged approximately 10% Wednesday following Seagate’s earnings beat and robust forward guidance
- A Wall Street Journal article about OpenAI falling short of growth projections triggered Tuesday’s decline
- Seagate shares soared 20% to $691.18, lifting the entire storage industry
- WDC exceeded Q3 projections last quarter — EPS came in at $2.13 versus $1.93 forecast, revenue jumped 25.2% YoY
- Cantor Fitzgerald and Bank of America upgraded their price objectives to $500 and $495 each
Western Digital shares advanced approximately 10% during Wednesday’s trading session, bouncing back from the previous day’s steep decline linked to AI expenditure concerns.
Western Digital Corporation, WDC
The recovery followed hard-drive competitor Seagate Technology delivering quarterly results that exceeded analyst forecasts and providing robust guidance for the upcoming quarter, alleviating concerns regarding data storage market demand.
Seagate shares jumped 20% to reach $691.18 during the session.
The storage sector experienced a selloff on Tuesday after The Wall Street Journal published a report indicating OpenAI had fallen short of important growth benchmarks. This development rattled investors holding positions in AI infrastructure-related equities, including WDC.
WDC began Wednesday’s session at $390.75, advancing to $432.90 during morning hours — representing approximately 10.9% growth.
Sandisk gained 8.2% while Micron increased 4.5%, with D.A. Davidson launching coverage on Micron with a Buy rating and $1,000 price objective.
Wall Street Raises Price Objectives
Financial analysts have expressed optimism regarding WDC ahead of its scheduled Q3 earnings release on April 30. Cantor Fitzgerald increased its price objective to $500, while Bank of America elevated theirs to $495, both referencing constrained HDD supply conditions and strengthening NAND pricing trends.
Wells Fargo adjusted its target upward from $260 to $335. Rosenblatt and Wedbush continue to hold Buy-equivalent positions. Currently, twenty analysts assign the stock a Buy rating, while four maintain Hold ratings. The consensus price objective stands at $320.38.
Options market activity suggests an anticipated price movement of approximately 11.6% following the earnings announcement — indicating heightened expectations in both directions.
WDC’s previous quarterly results exceeded analyst projections. The company delivered EPS of $2.13, surpassing the $1.93 consensus estimate. Revenue reached $3.02 billion, representing a 25.2% year-over-year increase and exceeding the $2.93 billion projection.
Growing Institutional Ownership
Pictet Asset Management expanded its WDC position by 62.1% during Q4, acquiring an additional 131,247 units to reach a total holding of 342,516 shares, valued at approximately $59 million at that time.
Institutional shareholders currently control 92.51% of the company’s outstanding stock.
Melius Research analyst Ben Reitzes launched coverage of both Micron and Sandisk with Buy recommendations on Monday, characterizing memory as “existential” to the AI expansion. He communicated to investors that demand will likely increase “exponentially.”
WDC has appreciated 127% year-to-date through Tuesday’s closing price. Sandisk has climbed 322% during the same timeframe. Seagate and Micron have advanced 110% and 77%, respectively.
Company insiders have divested 92,711 units valued at approximately $24.3 million during the previous quarter. CEO Irving Tan sold 20,000 units on February 2nd at an average transaction price of $255.44.
WDC’s 50-day moving average currently sits at $309.01, while its 200-day average registers at $230.51. The shares reached a one-year peak of $416.37 prior to Wednesday’s trading session.
Analysts forecast full-year EPS of $8.52 for the ongoing fiscal year.
