TLDR
- WDC fell 8.6% Monday, dragged down by a broader tech sell-off tied to Middle East tensions and energy price concerns.
- Google’s new TurboQuant AI memory compression algorithm spooked investors, adding extra selling pressure on memory stocks.
- Bernstein upgraded WDC to Outperform from Market Perform, calling the selloff an attractive entry point.
- Despite the recent drop, WDC is up over 522% in the past 12 months, and 17 analysts have recently revised earnings estimates upward.
- Earnings are expected April 29, with EPS of $2.30 projected — up from $1.36 a year ago.
Western Digital has had a wild few days. The stock dropped 8.6% on Monday, falling to $251.67, as a mix of macro concerns and a new Google AI product rattled memory and storage investors. Then Tuesday morning, it was already clawing back.
Western Digital Corporation, WDC
The Monday sell-off had two drivers. First, broader tech weakness tied to concerns about the Middle East conflict and rising energy prices pulled many names lower. Second, Alphabet unveiled TurboQuant — an AI-driven memory compression algorithm — which sent ripples through the hard disk drive and NAND memory sector.
But one analyst wasted no time pushing back on that reaction. Bernstein upgraded WDC to Outperform from Market Perform, arguing the TurboQuant report should have zero impact on hard disk drive demand and only negligible impact on NAND demand. The firm called the sell-off an attractive buying opportunity.
InvestingPro backed that view, flagging the stock as currently undervalued and trading below its Fair Value. WDC’s PEG ratio sits at just 0.12 — a sign the market may be underpricing its growth runway.
S&P Global also recently upgraded Western Digital’s credit rating to BBB- with a stable outlook, following the company’s move to exchange 5.8 million Sandisk shares — valued at $545 each — for debt. WDC also redeemed all outstanding 4.75% Senior Notes due 2026.
Cantor Fitzgerald raised its price target to $420 with an Overweight rating after Western Digital’s Innovation Day event. Morgan Stanley lifted its target to $369, pointing to strong demand for AI storage.
Technical Picture
From a technical standpoint, WDC is trading 8.5% below its 20-day simple moving average, pointing to short-term pressure. But it’s still 14% above its 100-day SMA, keeping the longer-term trend intact.
The RSI sits at 41.57, which leans toward softer momentum without hitting oversold territory. The MACD at 3.04 remains below its signal line of 7.04, suggesting the recent upside momentum has cooled. Key support is at $238.00, with resistance at $296.50.
The stock is up 522% over the past 12 months, sitting within its 52-week range of $28.83 to $319.62 — closer to the top than the bottom.
What’s Ahead
The next big catalyst is the April 29 earnings report. Analysts are projecting EPS of $2.30, up from $1.36 a year ago, on revenue of $3.23 billion versus $2.29 billion the prior year. That would represent solid year-over-year growth on both fronts.
The analyst consensus is a Buy, with an average price target of $271.79. Citigroup recently raised its target to $335, Wedbush holds at $325 with an Outperform, and Goldman Sachs sits at Neutral with a $250 target.
With 17 analysts revising earnings estimates upward and Bernstein now in the Outperform camp, the near-term narrative around WDC has shifted quickly from panic to potential.
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