TLDR
- WDC jumped ~10% Wednesday after Seagate beat earnings and issued strong guidance
- Tuesday’s selloff was triggered by a WSJ report that OpenAI missed growth targets
- Seagate rallied 20% to $691.18, dragging the storage sector higher
- WDC beat Q3 estimates last quarter â EPS $2.13 vs $1.93 expected, revenue up 25.2% YoY
- Cantor Fitzgerald and Bank of America raised price targets to $500 and $495 respectively
Western Digital stock climbed roughly 10% on Wednesday, recovering from a sharp drop the day before that was tied to concerns about AI spending.
Western Digital Corporation, WDC
The rebound came after hard-drive rival Seagate Technology posted earnings that beat expectations and issued strong guidance for its next quarter, easing worries about data storage demand.
Seagate itself surged 20% to $691.18 on the day.
Tuesday’s selloff hit the storage sector after The Wall Street Journal reported that OpenAI had missed key growth targets. That spooked investors in stocks tied to AI infrastructure, including WDC.
WDC opened Wednesday at $390.75, climbing to $432.90 in early trading â a gain of around 10.9%.
Sandisk rose 8.2% and Micron added 4.5%, with D.A. Davidson initiating Micron at Buy with a $1,000 price target.
Analyst Price Targets on the Rise
Wall Street has been bullish on WDC heading into its upcoming Q3 earnings on April 30. Cantor Fitzgerald raised its price target to $500, and Bank of America lifted theirs to $495, both citing tight HDD supply and improving NAND pricing.
Wells Fargo moved its target from $260 to $335. Rosenblatt and Wedbush both maintain Buy-equivalent ratings. Twenty analysts currently rate the stock a Buy, with four at Hold. The consensus target sits at $320.38.
The options market is pricing in a move of about 11.6% after earnings â pointing to elevated expectations either way.
WDC’s last quarterly report came in ahead of estimates. The company posted EPS of $2.13, beating the $1.93 consensus. Revenue came in at $3.02 billion, up 25.2% year-over-year and ahead of the $2.93 billion forecast.
Institutional Interest Building
Pictet Asset Management raised its WDC stake by 62.1% in Q4, buying 131,247 additional units to hold 342,516 total, worth around $59 million at the time.
Institutional investors now own 92.51% of the company’s stock.
Melius Research analyst Ben Reitzes initiated coverage of both Micron and Sandisk at Buy on Monday, describing memory as “existential” for the AI boom. He told investors demand is likely to compound “exponentially.”
WDC has gained 127% year-to-date through Tuesday’s close. Sandisk is up 322% over the same period. Seagate and Micron are up 110% and 77%, respectively.
Insiders have sold 92,711 units worth roughly $24.3 million over the last quarter. CEO Irving Tan sold 20,000 units on February 2nd at an average price of $255.44.
WDC’s 50-day moving average stands at $309.01, and its 200-day average is $230.51. The stock hit a one-year high of $416.37 before Wednesday’s session.
Analysts project full-year EPS of $8.52 for the current fiscal year.
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