Track market-moving stories before they get noisy

Key Takeaways Western Digital ended fiscal 2026 with $3.51 billion in free cash flow and about $500 million in net cash.WDC returned $3.1 billion to shareholders in fiscal 2026 through dividends and share repurchases.WDC expects fiscal Q1 revenue of $4.1 billion, plus or minus $100 million, and non-GAAP EPS of $4.00. Western Digital Corporation (WDC - Free Report) entered fiscal 2027 with stronger cash generation and a net cash position after a year of significant shareholder returns. In fiscal 2026, operating cash flow reached $3.93 billion, up 132% year over year, while free cash flow (FCF) rose 145% to $3.51 billion. With fiscal 2026 revenues of $12.9 billion, FCF margin was about 27%. Capital expenditures totaled $418 million for the year.

The company returned $3.1 billion to shareholders during fiscal 2026 through dividends and share repurchases. In the fiscal fourth quarter, Western Digital generated $1.4 billion in operating cash flow and $1.3 billion in free cash flow, equal to a 34% FCF margin. It reported repurchases of 2.3 million shares for $1 billion and paid $54 million in dividends. Management noted that the repurchase figures included $328 million used to settle the conversion premium on certain convertible notes in cash instead of stock, avoiding roughly 773,000 new shares. Western Digital also monetized its remaining 1.7 million SanDisk Corporation (SNDK - Free Report) shares by exchanging them for 4.8 million Western Digital shares.

At fiscal year-end, Western Digital held $1.6 billion in cash and $1.1 billion in debt, resulting in a net positive cash position of about $500 million. On the last earnings call, management highlighted that there was no change to the company’s strategy and reaffirmed its commitment to returning FCF to shareholders through dividends and share repurchases. The board also declared a 15- cents-per-share dividend payable Sept. 17, 2026, to shareholders of record on Sept. 8.

For the first quarter of fiscal 2027, Western Digital expects revenue of $4.1 billion, plus or minus $100 million, gross margin of 55-56%, operating expenses of $390-$400 million, interest and other expenses of about $15 million, a 17% tax rate and non-GAAP EPS of $4.00, plus or minus 15 cents, based on roughly 388 million diluted shares.
Management stated that demand and favorable pricing to continue, while investments are being made in heads, media operations and automation without adding unit-capacity capital expenditures. Western Digital is on track to ship its 44-terabyte HAMR product in the first half of calendar 2027.

Taking a Look at WDC’s CompetitorsSeagate Technology (STX - Free Report) delivered strong profitability and cash flow in fiscal 2026, supported by operating leverage, pricing and disciplined spending. Non-GAAP operating margin expanded to 44.6% from 26.2% a year earlier, while June-quarter free cash flow reached $1.12 billion, or about 31% of revenues. Fiscal 2026 FCF hit a record $3.1 billion. Financial flexibility also improved as gross debt fell $1.4 billion, leaving net leverage at 0.4 times adjusted EBITDA. Seagate later retired $1 billion of high-yield notes and plans to eliminate the remaining convertible notes, reducing interest expense and supporting shareholder returns and future technology investments and growth initiatives.

SanDisk’s strong cash generation supports continued shareholder returns and technology investments. Adjusted free cash flow reached $5.04 billion in fourth-quarter fiscal 2026, representing a 56% margin, excluding $1.94 billion of NBM  prepayments and deposits. The company ended fiscal 2026 with $4.76 billion in cash and no long-term debt. Sandisk repurchased $4.5 billion of shares during the quarter and expanded its authorization by $14 billion, leaving $15.5 billion available. Management plans to invest in BiCS8 and BiCS10 while maintaining buybacks. Fiscal 2027 capital spending is expected to decline to roughly 6% of revenues.

WDC Price Performance, Valuation and EstimatesIn the past year, shares of WDC have surged 406% compared with the Zacks Computer-Storage Devices industry’s growth of 392.8%.

Image Source: Zacks Investment Research

Going by the price/earnings ratio, the company’s shares currently trade at 20.86 forward earnings compared with 10.67 for the industry.

Image Source: Zacks Investment Research

WDC’s estimate revisions are currently on an upward trajectory. The Zacks Consensus Estimate for the company’s earnings for fiscal 2027 has been revised upward by 7.5% to $20.03 over the past 60 days, while the same for fiscal 2028 has gone up 7.6% to $34.74.

Image Source: Zacks Investment Research

Currently, Western Digital has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the latest trading session, Western Digital (WDC - Free Report) closed at $477.30, marking a +2.1% move from the previous day. The stock's change was more than the S&P 500's daily loss of 0.58%. Meanwhile, the Dow lost 1.18%, and the Nasdaq, a tech-heavy index, lost 0.32%.

Shares of the maker of hard drives for businesses and personal computers have appreciated by 6.64% over the course of the past month, outperforming the Computer and Technology sector's gain of 0.12%, and the S&P 500's loss of 0.36%.

Investors will be eagerly watching for the performance of Western Digital in its upcoming earnings disclosure. The company's upcoming EPS is projected at $4.07, signifying a 128.65% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $4.16 billion, indicating a 47.45% growth compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $20.03 per share and revenue of $18.78 billion, indicating changes of +95.99% and +45.39%, respectively, compared to the previous year.

Any recent changes to analyst estimates for Western Digital should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Western Digital currently has a Zacks Rank of #2 (Buy).

In terms of valuation, Western Digital is presently being traded at a Forward P/E ratio of 23.33. This denotes a premium relative to the industry average Forward P/E of 10.36.

It's also important to note that WDC currently trades at a PEG ratio of 1.94. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer- Storage Devices was holding an average PEG ratio of 1.38 at yesterday's closing price.

The Computer- Storage Devices industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 21, placing it within the top 9% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

Western Digital (WDC - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Shares of this maker of hard drives for businesses and personal computers have returned +7.6% over the past month versus the Zacks S&P 500 composite's -0.1% change. The Zacks Computer- Storage Devices industry, to which Western Digital belongs, has gained 4.8% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

Western Digital is expected to post earnings of $4.07 per share for the current quarter, representing a year-over-year change of +128.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +15.2%.

For the current fiscal year, the consensus earnings estimate of $20.03 points to a change of +96% from the prior year. Over the last 30 days, this estimate has changed +10.6%.

For the next fiscal year, the consensus earnings estimate of $34.74 indicates a change of +73.4% from what Western Digital is expected to report a year ago. Over the past month, the estimate has changed -2.1%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Western Digital is rated Zacks Rank #2 (Buy).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Western Digital, the consensus sales estimate for the current quarter of $4.16 billion indicates a year-over-year change of +47.5%. For the current and next fiscal years, $18.78 billion and $26.81 billion estimates indicate +45.4% and +42.7% changes, respectively.

Last Reported Results and Surprise HistoryWestern Digital reported revenues of $3.75 billion in the last reported quarter, representing a year-over-year change of +43.8%. EPS of $3.56 for the same period compares with $1.66 a year ago.

Compared to the Zacks Consensus Estimate of $3.7 billion, the reported revenues represent a surprise of +1.14%. The EPS surprise was +6.27%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Western Digital is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Western Digital. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.

The memory industry remains in focus as investors weigh strong pricing, rapid market growth and shifting competitive positions across major players including Samsung Electronics Co. Ltd. (OTC:SSNLF), SK Hynix Inc. (NASDAQ:SKHY), Micron Technology Inc. (NASDAQ:MU), Kioxia, Sandisk Corp. (NASDAQ:SNDK) and YMTC.

Roundhill Investments chief investment strategist Drew Pettit remains constructive on memory stocks after their recent pullback, arguing that industry fundamentals have improved even as investor sentiment cooled sharply.

Pettit told CNBC on Wednesday that memory stocks have started to stabilize following an aggressive reset across higher-risk technology trades. He believes the correction has created a healthier setup because underlying fundamentals now look stronger than they did when the stocks peaked.

He pointed to continued increases in memory contract prices and rising longer-term estimates. Pettit said industry revenue could reach roughly three times current levels by 2030, supporting his view that investors can still put money to work in the broader secular memory theme.

Pettit Sees Long-Term Growth Supporting ValuationsPettit cautioned investors against focusing too heavily on traditional price-to-earnings multiples after the sharp moves in stocks such as Sandisk, Micron, Western Digital Corp. (NASDAQ:WDC) and Seagate Technology Holdings PLC (NASDAQ:STX).

Trending

Instead, he prefers evaluating the sector based on the long-term growth expectations embedded in current valuations.

Pettit estimates memory stocks currently price in roughly 30% annualized earnings growth over the next five years. He said Wall Street’s fundamental estimates suggest the industry could deliver growth of 35% or more, leaving potential upside if companies meet those projections.

"So, the valuation, forget the P/E, when we think about the DCF, it actually makes a lot of sense right here," Pettit said.

He added that valuation multiples should follow fundamentals as long as memory companies continue delivering the long-term growth investors expect.

Pettit views the recent stock-price reset as an opportunity rather than evidence that the memory growth story has weakened, pointing to higher contract pricing, improving estimates and substantial potential industry expansion through 2030.

Samsung Leads NAND Market As Micron Gains ShareCounterpoint data showed the NAND market grew 70% in the second quarter of 2026, following 90% growth in the first quarter, while prices increased 55% sequentially.

Samsung remained the largest player with a 28% market share, down from 29% in the first quarter. SK Hynix ranked second at 19%, up from 18%.

Micron increased its share to 15% from 13%, moving into third place as higher selling prices supported its position.

Kioxia held a 14% share, while YMTC also reached 14%, up from 13% in the prior quarter and above Counterpoint’s revenue expectations. Sandisk’s share declined to 11% from 13%.

Price Action: Sandisk shares were down 1.31% at $1533.00, Micron Technology shares were down 0.92% at $947.30 and SK hynix shares were down 3.37% at $159.41 during premarket trading on Thursday, according to Benzinga Pro data.

Photo via Shutterstock

Read Next

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Western Digital (NASDAQ:WDC – Get Free Report) and TDK (OTCMKTS:TTDKY – Get Free Report) are both large-cap technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Profitability This table compares Western Digital and TDK’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets Western Digital 72.95% 48.15% 25.79% TDK 7.87% 9.15% 4.48% Analyst Ratings This is a summary of recent ratings and price targets for Western Digital and TDK, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Western Digital 0 5 18 2 2.88 TDK 0 1 0 1 3.00 Western Digital presently has a consensus price target of $534.56, suggesting a potential upside of 18.68%. Given Western Digital’s higher probable upside, research analysts plainly believe Western Digital is more favorable than TDK. Volatility & Risk Western Digital has a beta of 2.13, suggesting that its stock price is 113% more volatile than the S&P 500. Comparatively, TDK has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Insider & Institutional Ownership 92.5% of Western Digital shares are owned by institutional investors. 0.2% of Western Digital shares are owned by company insiders. Comparatively, 0.0% of TDK shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings This table compares Western Digital and TDK”s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Western Digital $12.92 billion 12.02 $9.42 billion $24.21 18.61 TDK $16.64 billion 2.18 $1.29 billion $0.68 27.46 Western Digital has higher earnings, but lower revenue than TDK. Western Digital is trading at a lower price-to-earnings ratio than TDK, indicating that it is currently the more affordable of the two stocks.

Dividends Western Digital pays an annual dividend of $0.60 per share and has a dividend yield of 0.1%. TDK pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. Western Digital pays out 2.5% of its earnings in the form of a dividend. TDK pays out 23.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary Western Digital beats TDK on 13 of the 17 factors compared between the two stocks.

(Get Free Report)

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set top boxes; and flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications. The company also provides enterprise HDDs; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; and data storage platforms. In addition, it offers external HDD storage products in mobile and desktop form; client portable SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, and cameras and smart video systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field backup of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the Western Digital, SanDisk, and WD brands to original equipment manufacturers, distributors, dealers, resellers, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.

About TDK (Get Free Report)

TDK Corporation, together with its subsidiaries, engages in manufacture and sale of electronic components in Japan, Europe, China, Asia, the Americas, and internationally. The company operates through Passive Components, Sensor Application Products, Magnetic Application Products, Energy Application Products, and Other segments. The Passive Components segment offers ceramic capacitors, aluminum electrolytic capacitors, film capacitors, high-frequency components, piezoelectric materials, and circuit protection components, as well as inductive devices, including ferrite cores, coils, and transformers. The Sensor Application Products segment provides temperature and pressure, magnetic, and MEMS sensors. The Magnetic Application Products segment offers hard disk drives (HDD) heads, HDD suspension assemblies, and magnets. The Energy Application Products segment provides energy devices comprising rechargeable batteries, and power supplies. The Other segment provides mechatronics production equipment and camera module micro actuators for smartphones and other products. The company also engages in engages in insurance and real estate agency businesses. The company was formerly known as Tokyo Denki Kagaku Kogyo K.K. and changed its name to TDK Corporation in 1983. TDK Corporation was founded in 1935 and is headquartered in Tokyo, Japan.

Receive News & Ratings for Western Digital Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Western Digital and related companies with MarketBeat.com's FREE daily email newsletter.

A downtrend has been apparent in Western Digital (WDC - Free Report) lately. While the stock has lost 9.2% over the past week, it could witness a trend reversal as a hammer chart pattern was formed in its last trading session. This could mean that the bulls have been able to counteract the bears to help the stock find support.

While the formation of a hammer pattern is a technical indication of nearing a bottom with potential exhaustion of selling pressure, rising optimism among Wall Street analysts about the future earnings of this maker of hard drives for businesses and personal computers is a solid fundamental factor that enhances the prospects of a trend reversal for the stock.

What is a Hammer Chart and How to Trade It?This is one of the popular price patterns in candlestick charting. A minor difference between the opening and closing prices forms a small candle body, and a higher difference between the low of the day and the open or close forms a long lower wick (or vertical line). The length of the lower wick being at least twice the length of the real body, the candle resembles a 'hammer.'

In simple terms, during a downtrend, with bears having absolute control, a stock usually opens lower compared to the previous day's close, and again closes lower. On the day the hammer pattern is formed, maintaining the downtrend, the stock makes a new low. However, after eventually finding support at the low of the day, some amount of buying interest emerges, pushing the stock up to close the session near or slightly above its opening price.

When it occurs at the bottom of a downtrend, this pattern signals that the bears might have lost control over the price. And, the success of bulls in stopping the price from falling further indicates a potential trend reversal.

Hammer candles can occur on any timeframe -- such as one-minute, daily, weekly -- and are utilized by both short-term as well as long-term investors.

Like every technical indicator, the hammer chart pattern has its limitations. Particularly, as the strength of a hammer depends on its placement on the chart, it should always be used in conjunction with other bullish indicators.

Here's What Makes the Trend Reversal More Likely for WDCThere has been an upward trend in earnings estimate revisions for WDC lately, which can certainly be considered a bullish indicator on the fundamental side. That's because a positive trend in earnings estimate revisions usually translates into price appreciation in the near term.

The consensus EPS estimate for the current year has increased 10.6% over the last 30 days. This means that the Wall Street analysts covering WDC are majorly in agreement about the company's potential to report better earnings than what they predicted earlier.

If this is not enough, you should note that WDC currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises. And stocks carrying a Zacks Rank #1 or 2 usually outperform the market. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Moreover, the Zacks Rank has proven to be an excellent timing indicator, helping investors identify precisely when a company's prospects are beginning to improve. So, for the shares of Western Digital, a Zacks Rank of 2 is a more conclusive fundamental indication of a potential turnaround.

Avala Global LP bought a new position in shares of Western Digital Corporation (NASDAQ:WDC – Free Report) during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm bought 189,100 shares of the data storage provider’s stock, valued at approximately $120,782,000. Western Digital accounts for 4.5% of Avala Global LP’s portfolio, making the stock its 7th largest holding. Avala Global LP owned 0.05% of Western Digital at the end of the most recent quarter.

Several other large investors have also added to or reduced their stakes in WDC. Norges Bank purchased a new stake in shares of Western Digital in the fourth quarter worth $788,729,000. Northern Trust Corp raised its position in shares of Western Digital by 11.2% during the 3rd quarter. Northern Trust Corp now owns 3,805,463 shares of the data storage provider’s stock valued at $456,884,000 after purchasing an additional 384,103 shares during the period. Soroban Capital Partners LP lifted its stake in shares of Western Digital by 1,926.3% during the 2nd quarter. Soroban Capital Partners LP now owns 3,061,134 shares of the data storage provider’s stock valued at $195,882,000 after buying an additional 2,910,062 shares in the last quarter. AQR Capital Management LLC lifted its stake in shares of Western Digital by 70.4% during the 4th quarter. AQR Capital Management LLC now owns 2,972,703 shares of the data storage provider’s stock valued at $512,107,000 after buying an additional 1,228,661 shares in the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its holdings in Western Digital by 6.0% in the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 2,809,409 shares of the data storage provider’s stock worth $483,977,000 after buying an additional 159,167 shares during the period. Hedge funds and other institutional investors own 92.51% of the company’s stock.

Western Digital News Summary Here are the key news stories impacting Western Digital this week:

Positive Sentiment: Western Digital disclosed exchange agreements covering approximately $191 million of its 3.00% convertible notes due 2028. The transaction will provide holders with cash and shares, potentially reducing debt, although the stock component could create some dilution. The exchanges are expected to close on or after September 2. Western Digital convertible notes article Positive Sentiment: Investors continue to see support from AI, cloud and data-center demand. Western Digital recently reported quarterly revenue of $3.75 billion, up 43.8% year over year, and non-GAAP EPS of $3.56 versus the $3.31 consensus. Management’s next-quarter outlook also points to continued strong growth. Western Digital debt exchange and AI demand analysis Positive Sentiment: A hammer chart pattern suggests technical support after the stock’s recent decline, while upward earnings-estimate revisions may improve the likelihood of a near-term rebound. Western Digital bottoming pattern article Neutral Sentiment: Analyst sentiment remains broadly favorable, with a consensus “Moderate Buy” rating and a median recent price target of approximately $597.50. However, targets vary widely, reflecting uncertainty around valuation and execution. Negative Sentiment: Western Digital is assessing potential effects from new U.S. sanctions related to Iran, including possible compliance costs, supply-chain disruptions and impacts on contract manufacturing or shipments. Western Digital Iran sanctions exposure article Negative Sentiment: Insider activity has been heavily weighted toward sales, including transactions by executives and directors. The reported sales were made under pre-arranged trading plans, reducing their significance, but they remain a potential overhang for sentiment. Negative Sentiment: Broader caution toward highly valued AI and memory stocks, ahead of Nvidia’s earnings, and concerns about potential Chinese memory competition could pressure sector valuations and future pricing. Western Digital Stock Up 4.0% Shares of Western Digital stock opened at $468.88 on Thursday. Western Digital Corporation has a twelve month low of $77.90 and a twelve month high of $799.87. The business has a 50-day moving average price of $538.41 and a 200-day moving average price of $438.22. The firm has a market cap of $161.61 billion, a price-to-earnings ratio of 19.37 and a beta of 2.14. Western Digital (NASDAQ:WDC – Get Free Report) last posted its earnings results on Wednesday, August 5th. The data storage provider reported $3.56 EPS for the quarter, topping analysts’ consensus estimates of $3.31 by $0.25. Western Digital had a return on equity of 48.15% and a net margin of 72.95%.The company had revenue of $3.75 billion for the quarter, compared to the consensus estimate of $3.70 billion. During the same period in the previous year, the business earned $1.66 earnings per share. The firm’s revenue for the quarter was up 43.8% on a year-over-year basis. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. On average, equities analysts expect that Western Digital Corporation will post 19.65 EPS for the current fiscal year.

Western Digital Dividend Announcement The company also recently announced a quarterly dividend, which will be paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th will be given a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital’s dividend payout ratio is currently 2.48%.

Wall Street Analysts Forecast Growth A number of brokerages have issued reports on WDC. JPMorgan Chase & Co. increased their price target on Western Digital from $530.00 to $650.00 and gave the stock an “overweight” rating in a research note on Friday, June 12th. Bank of America upped their price objective on Western Digital from $610.00 to $732.00 and gave the stock a “buy” rating in a research note on Wednesday, July 1st. Zacks Research upgraded Western Digital from a “hold” rating to a “strong-buy” rating in a research report on Wednesday, May 6th. Citigroup cut their target price on Western Digital from $800.00 to $740.00 and set a “buy” rating for the company in a research report on Friday, August 7th. Finally, Melius Research set a $1,050.00 price target on Western Digital and gave the stock a “buy” rating in a report on Monday, June 29th. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average price target of $534.56.

Get Our Latest Stock Report on WDC

Insider Activity In related news, insider Vidyadhara K. Gubbi sold 2,475 shares of the firm’s stock in a transaction on Monday, June 1st. The shares were sold at an average price of $556.24, for a total value of $1,376,694.00. Following the completion of the transaction, the insider directly owned 85,154 shares of the company’s stock, valued at approximately $47,366,060.96. This trade represents a 2.82% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Irving Tan sold 20,000 shares of the business’s stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the completion of the sale, the chief executive officer owned 575,966 shares in the company, valued at $256,287,591.02. This represents a 3.36% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 24,634 shares of company stock worth $11,357,073. 0.18% of the stock is currently owned by insiders.

Western Digital Profile (Free Report)

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.

Read More Five stocks we like better than Western Digital Williams-Sonoma’s Quarter Gave Bulls More Than Just a Beat-and-Raise Alcoa’s Gallium Project Opens a New Door Beyond Aluminum Oura’s $16 Billion IPO Could Put a New Price on Wearable Tech Can Tesla’s Flying Roadster Distract From Its Real Risks? Want to see what other hedge funds are holding WDC? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Western Digital Corporation (NASDAQ:WDC – Free Report).

Receive News & Ratings for Western Digital Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Western Digital and related companies with MarketBeat.com's FREE daily email newsletter.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Western Digital (WDC - Free Report) .

Western Digital currently has an average brokerage recommendation (ABR) of 1.44, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 25 brokerage firms. An ABR of 1.44 approximates between Strong Buy and Buy.

Of the 25 recommendations that derive the current ABR, 19 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 76% and 4% of all recommendations.

Brokerage Recommendation Trends for WDC

Check price target & stock forecast for Western Digital here>>>

The ABR suggests buying Western Digital, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Is WDC a Good Investment?In terms of earnings estimate revisions for Western Digital, the Zacks Consensus Estimate for the current year has increased 10.6% over the past month to $20.03.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Western Digital. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for Western Digital may serve as a useful guide for investors.

$217.55

-4.57%

Markets haven’t moved much in August as volatility has hit, especially with AI. But the memory and storage trade isn’t slowing.

In this article:NVDA

-4.57%

MU

-0.27%

WDC

-0.55%

NVIDIA’s (NVDA) blowout earnings and guidance – expected 70% revenue growth in 2028 –prove the AI boom is still booming up and down the stack, from energy to data centers. Today I’ll show you two AI memory stocks with huge potential.

Relentless Institutional Support This is very much a pick and axe story. As AI is deployed, more high-bandwidth memory is required. The winners are the ones receiving institutional support.

Right now, Micron (MU) is the poster child for relentless institutional support. The company builds memory for AI processors and sports a $1 trillion market capitalization.

Memory needs have only increased, and yet the stock has been range-bound:

MU shares have been in consolidation since June, knocking the forward price-earnings ratio down to 5.91X. Source: MoneyFlows.com But that 5.91X forward P/E ratio is incredible. It’s one of the cheapest stocks in the market and is projected for huge per-share earnings growth – from $73.23 this year to almost $170 in 2028.

No wonder it’s been an institutional darling.

The blue bars below on the right highlight the non-stop outlier inflow signals responsible for MU’s amazing performance:

Institutional inflows have been a constant for MU, and now the average analyst price target sits at $1,571. Source: MoneyFlows.com There is no mistaking when institutions get behind a stock – the share price flies higher.

A second AI memory stock with huge potential is Western Digital (WDC). It’s a $170 billion market cap company focused on mass storage like hard drives.

On its last earnings call, the company cited how physical AI, agentic AI, and synthetic data workloads will drive storage demand beyond 2027. Still, shares have stagnated:

Consistent selling has pushed the P/E ratio for WDC to 19.6X – it was nearly 45X in June. Source: MoneyFlows.com When you consider the latest fundamentals, shares not going higher is confusing.

In 2027, revenues are expected to hit $19.1 billion, with over $8 billion of that being profit. And in 2029, it’s $31.9 billion and $16.7 billion for revenue and net income, respectively.

Institutions often move before the masses. That seems to have happened with WDC:

WDC’s consensus analyst price target is $684, implying 45.9% upside from the current price of $469. Source: MoneyFlows.com Big Money was ahead of the memory and storage bottleneck. The flows find the outliers early.

New Frontiers Investing is all about stacking the odds in your favor.

Institutional inflows can identify where the biggest investors are putting their huge amounts of capital. And that data can supercharge your own portfolio.

If you are a Registered Investment Advisor (RIA) or a serious investor, take your investing to the next level. MoneyFlows created 11 Frontiers indexes to help serious investors capture AI-driven themes and learn the leading stocks in each Frontier. Get started here.

Disclosure: at the time of publication, the author holds no positions in MU or WDC.

Related Articles

The Week Ahead: Broadcom AI Test, Payrolls and Fed Risk Set September’s ToneS&P500: Sector Rotation Holds as Warsh Reprices September Fed ForecastNasdaq Index: Tech Stocks Slip as Warsh Reprices the Fed ForecastAbout the Author

Lucas is a well-versed equity investor and educator. He currently is co-founder of research and analytics firm, MAPsignals.com, which focuses on finding outlier stocks by following the Big Money.

Latest news and analysis

Editors’ Picks

Western Digital has surged 168% this year while peers in flash and DRAM keep climbing, yet WDC stock just shed 13% without a single company-specific headline to explain it. Something inside the storage market is shifting, and the answer changes…

Shares of Western Digital (NASDAQ:WDC | WDC Price Prediction) have moved the wrong way during a month when nearly every other storage and memory name has rallied. Western Digital stock is down 13% over the trailing month, and it’s trading at $465.32 Friday afternoon.

The drop looks unusual against the backdrop. SanDisk (NASDAQ:SNDK) stock is up 16% over the same stretch, while Micron Technology (NASDAQ:MU) stock is up 13% and the Roundhill Memory ETF (CBOE:DRAM) is up 17%. Meanwhile, direct HDD rival Seagate Technology (NASDAQ:STX) stock is down 1%.

The context still matters here. Western Digital stock was up 168% year to date (YTD) through Thursday, August 27’s close, so this pullback lands on top of an extraordinary run rather than inside a broken chart.

A Storage Split Across Memory and Disk A sector selloff explanation doesn’t fit here. With SanDisk, Micron, and the Roundhill Memory ETF all higher, and Seagate Technology stock only marginally lower, the memory and storage complex broadly rose while Western Digital fell.

The cleaner read is a product-mix divide. Western Digital, following the separation of its Flash business into Sandisk Corporation, is now a pure-play hard disk drive company. Seagate Technology is also centered on hard drives, and both names lagged. SanDisk (NAND flash) and Micron (DRAM and NAND) rallied hard.

That memory ETF, dominated by Samsung Electronics, SK hynix, and Micron, followed those flash and DRAM names higher. Notably, no verified company-specific catalyst at Western Digital appears to explain the decline. The AI-driven bid in memory over the past month appears to have gone to flash and DRAM instead of to spinning disk, and the split in performance lines up cleanly with that divide.

Profit Taking After a Historic Run The other mechanism worth naming is straightforward profit taking. Western Digital stock had climbed 168% YTD heading into this stretch, and any name that extended can give back double digits without any news at all. Portfolio managers rebalancing after an outsized winner is standard housekeeping.

The fundamentals still tell a constructive story. CEO Irving Tan stated on the fiscal fourth-quarter call that “Today, roughly 80% of data stored in a hyperscale data center resides on hard disk drives.” He also cited “continued confidence in the durability of demand” heading into fiscal 2027.

Additionally, Western Digital extended its EPS-estimate-beat streak to five consecutive quarters, and management pointed to long-term customer discussions extending through calendar year 2029, 2030 and 2031.

Sell, or Sit Tight? The case for selling rests on Western Digital being on the wrong side of a product-mix divide the market is actively pricing. If capital keeps flowing toward flash and DRAM exposure, hard drive names may lag even in a rising storage complex, and Western Digital stock carries a beta of 2.217 that amplifies any air-pocket lower.

Set against that, the case to sit tight rests on the huge YTD gain still being intact and on the durable role hard drives retain in mass-capacity storage. Analysts carry an average price target of $664.92 on Western Digital stock, with 18 buy and four strong-buy ratings against limited bearish coverage.

Both readings can be true at the same time. A high-momentum name digests a monster rally while the marginal AI storage dollar rotates toward flash and DRAM (we profiled seven companies powering the AI data-center buildout beyond the chipmakers in a free report, here: 7 Stocks Powering the AI Boom). Neither pattern is a verdict on the business.

What to Watch Next Investors may want to watch for signs of nearline HDD demand reasserting itself against the flash and DRAM bid in the current quarter. A rotation back toward capacity storage would matter for both Western Digital stock and Seagate Technology stock, especially with Western Digital guiding to 42% to 49% revenue growth year over year (YoY) in fiscal Q1 2027.

Traders should size their positions to survive further volatility. A 13% drawdown after a triple-digit rally isn’t inherently a broken thesis, though stretched names can compress further before finding footing. Keeping position sizes moderate, and treating any adds on weakness as scaled entries, is the more defensible playbook while the flash-versus-disk trade sorts itself out.

Contact [email protected] for any questions or corrections.

SAN JOSE, Calif.--(BUSINESS WIRE)--Western Digital Corporation (Nasdaq: WDC) today announced management participation in the following upcoming investor conference: Event: Citi's 2026 Global TMT Conference Date: Wednesday, September 9, 2026, at 5:50 a.m. PT / 8:50 a.m. ET The management presentation will be available as a live webcast, accessible through Western Digital's Investor Relations website at investor.wdc.com. An archived replay will be accessible through the website shortly after the.

Key Takeaways Western Digital posted 44% Q4 revenue growth, an earnings beat and a 54.4% non-GAAP gross margin.WDC sees Q1 fiscal 2027 revenue near $4.1B, with a non-GAAP gross margin of 55%-56% and EPS near $4.Western Digital's 40TB ePMR is in volume production, with 44TB and 50TB HAMR ramps planned for 2027. Western Digital Corporation (WDC - Free Report) ended fiscal 2026 with a fourth-quarter earnings beat, 44% revenue growth and sharply higher margins. The results give the company a strong starting point for fiscal 2027. The next test is execution. Higher-capacity drives must ramp on schedule if WDC is to translate rising cloud and artificial intelligence storage demand into sustained revenue, margin and earnings growth.

WDC's Q4 Beat Shows Demand and Pricing StrengthFourth-quarter revenues reached $3.75 billion, up 44% year over year and above the Zacks Consensus Estimate of $3.70 billion. Non-GAAP earnings of $3.56 per share topped the consensus mark of $3.35 and increased 109%.

Non-GAAP gross margin expanded 1,310 basis points year over year to 54.4%. A richer mix of higher-capacity drives, favorable pricing and manufacturing discipline helped lift profitability, while blended price per terabyte increased by the high teens.

Image Source: Zacks Investment Research

Western Digital Guides to Another Growth StepFor the first quarter of fiscal 2027, management expects revenues of $4.1 billion, plus or minus $100 million. At the midpoint, that represents about 45% year-over-year growth.

Western Digital also projects non-GAAP gross margin of 55%-56% and earnings of $4 per share, plus or minus 15 cents. The outlook implies another step up from fourth-quarter profitability if demand and pricing remain favorable.

WDC's 40TB ePMR Ramp Moves Into VolumeWestern Digital began shipping next-generation energy-assisted perpendicular magnetic recording drives with capacities up to 40 terabytes in the fiscal fourth quarter. The company has entered volume production with two customers.

Management expects the platform to account for about half of nearline bits by the third quarter of fiscal 2027. Higher capacity per drive should allow WDC to deliver more exabytes without a corresponding increase in unit volumes.

Western Digital's HAMR Timeline Becomes the Next TestThe roadmap calls for 44-terabyte heat-assisted magnetic recording products in the first half of calendar 2027 and 50-terabyte products in the second half. Customer qualification and manufacturing execution therefore remain central to the fiscal 2027 setup.

UltraSMR adoption is advancing as well. Western Digital expects the technology to represent about 60% of nearline exabyte shipments as fiscal 2027 ends, making the sequencing of multiple product transitions important to capacity and cost gains.

WDC's AI Storage Demand Broadens the OpportunityManagement sees inference, agentic artificial intelligence and physical artificial intelligence as persistent storage drivers because these workloads continuously create and retain data. High-bandwidth drives are also sampling with five customers, potentially extending HDD economics into higher-throughput workloads.

The theme is broader than WDC. Seagate Technology Holdings plc (STX - Free Report) reported fiscal fourth-quarter 2026 revenues of $3.6 billion as a mass-capacity storage provider, while Sandisk Corporation (SNDK - Free Report) said fiscal 2026 Datacenter revenues increased 437%, illustrating demand across different storage technologies.

Growth Scores Reinforce WDC's Execution SetupWDC's fiscal 2027 opportunity is substantial, but the product roadmap raises the execution bar. The company must sustain pricing, qualify new platforms and convert higher-capacity drives into the exabyte growth and margin expansion embedded in its outlook.

The stock currently carries a Zacks Rank #2 (Buy), along with a Growth Score of A and  Momentum Score of A. Those scores favor growth and momentum characteristics, while the Value Score of F and VGM Score of C point to a less attractive value profile and a mixed combined reading. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways WDC shares fell 11.6% in four weeks as Q4 revenue rose 44% and non-GAAP EPS jumped 109%.WDC's Q4 gross margin hit 54.4%, while Q1 fiscal 2027 guidance calls for 55%-56% and $4.1B revenue.WDC trades at 22.9X forward earnings versus 10.3X for its industry, leaving less room for missteps. Western Digital Corporation (WDC - Free Report) shares have fallen 11.6% in the past four weeks, even as the hard disk drive maker delivers faster growth and higher profitability. The pullback raises the question of whether improving fundamentals outweigh a demanding valuation.

Cloud demand, pricing and product transitions support the earnings case. Yet customer concentration and a premium multiple leave little room for execution missteps.

Why WDC's Past-Month Slide Deserves AttentionFiscal fourth-quarter revenues rose 44% year over year to $3.75 billion, while non-GAAP earnings advanced 109% to $3.56 per share. Those gains contrast with the stock's recent decline.

Image Source: Zacks Investment Research

Western Digital's Cloud Engine Is Still GrowingCloud contributed $3.3 billion, or 89% of fourth-quarter revenues, and rose 43% year over year. High-capacity nearline demand and favorable pricing drove the result, while management continues to see more than 25% exabyte demand growth over the medium term.

WDC also sees AI inference, agentic AI and physical AI as sources of persistent data creation. Seagate Technology Holdings plc (STX - Free Report) , another mass-capacity hard disk drive supplier, also cited cloud data-center demand in its fiscal fourth quarter and is scaling its HAMR-based Mozaic platform.

WDC's Margin Expansion Supports the Bull CaseNon-GAAP gross margin reached 54.4%, up 1,310 basis points year over year. The blended price per terabyte rose by the high teens, while cost per terabyte fell about 8%, widening earnings leverage.

For the first quarter of fiscal 2027, WDC expects non-GAAP gross margin of 55%-56% and revenues of about $4.1 billion at the midpoint. Management continues to target roughly 10% annual cost-per-terabyte reductions over the medium to long term.

Western Digital Faces Product and Customer RisksCloud concentration cuts both ways. With 89% of fourth-quarter revenues from that end market, purchasing shifts at a limited number of large customers can create quarterly volatility in exabyte shipments and pricing.

WDC is ramping 40-terabyte ePMR drives and UltraSMR technology and plans to ship 44-terabyte HAMR products in the first half of calendar 2027. Delays could weaken expected capacity and cost gains. Sandisk Corporation (SNDK - Free Report) , WDC's former flash business, is advancing NAND technologies for AI inference and data-center workloads, offering a flash-based storage comparison.

WDC's Premium Valuation Leaves Less Room for ErrorWDC trades at 22.9X forward earnings, versus 10.3X for the Computer-Storage Devices industry. That spread means investors are paying a sizable premium for growth, pricing discipline and technology execution.

The premium is harder to ignore after the stock's 496.9% gain over the past year. If demand, pricing or product ramps disappoint, multiple compression could offset part of the operating improvement.

Growth and Momentum Keep WDC's Signal ConstructiveThe 11.6% pullback has occurred alongside improving earnings rather than weakening operations. Whether it becomes an opportunity depends on continued cloud demand, margin expansion and timely product ramps, while valuation and customer concentration keep the risk-reward balanced.

WDC currently carries a Zacks Rank #2 (Buy). Its Growth Score of A and Momentum Score of A point to favorable growth and momentum characteristics, while the Value Score of F and VGM Score of C flag a weaker valuation profile and a mixed composite setup. That combination keeps the near-term signal constructive without removing valuation risk. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Business is booming, and investors are optimistic.

*Stock prices used were the afternoon prices of Aug. 15, 2026. The video was published on Aug.17, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Western Digital. The Motley Fool has a disclosure policy.Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Western Digital (WDC - Free Report) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Western Digital currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for WDC that show why this maker of hard drives for businesses and personal computers shows promise as a solid momentum pick.

Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For WDC, shares are up 17.15% over the past week while the Zacks Computer- Storage Devices industry is up 22.57% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 9.97% compares favorably with the industry's 27.58% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of Western Digital have risen 10.68%, and are up 602.59% in the last year. In comparison, the S&P 500 has only moved 4.83% and 21.31%, respectively.

Investors should also pay attention to WDC's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. WDC is currently averaging 8,400,273 shares for the last 20 days.

Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with WDC.

Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost WDC's consensus estimate, increasing from $18.32 to $20.03 in the past 60 days. Looking at the next fiscal year, 4 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom LineTaking into account all of these elements, it should come as no surprise that WDC is a #2 (Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Western Digital on your short list.

For decades, memory chips have been Wall Street’s quintessential boom-and-bust trade. Producers chase demand spikes with reflexive expansion, then supply floods the market, and prices collapse.

The artificial intelligence (AI) buildup is now testing that old playbook, as hyperscale data centers absorb every gigabyte of DRAM and NAND storage they can secure.

Famed investor Jim Cramer is making a structural case for memory stocks that have already staged an extraordinary rally, arguing investors haven’t missed the trade.

Supply bottlenecks, already flagged by tech executives as a core constraint on data-center expansion, are colliding with a new discipline among the chipmakers themselves.

Together – he argues – those two forces make the following 4 memory stocks attractive to buy into recent strength.   

SanDisk SNDK stock has already recorded over 7x year-to-date gains – yet, it has $15.5 billion left on the share buyback authorization.

That’s a lot of cash going back to shareholders instead of into uncommitted new factories.

Historically, triple-digit surges in memory stocks marked a peak, not a starting point; management teams rushed to build speculative capacity that eventually flooded the market.

But this time is different, said Jim Cramer in a recent segment of Mad Money. Manufacturing ramp-up in 2026 is tied to multiyear agreements rather than optimistic guesswork.

Sure, a sharp pullback in cloud spending could still revive old cyclical pressures – but for now, the absence of speculative inventory in the channel suggests SNDK buybacks are backed by durable pricing, not a rally running out of room.

A massive $5 billion buyback program authorized last year is still being worked through by Nasdaq-listed Seagate Technology, even as its shares have more than tripled year-to-date.

That combination, an aggressive repurchase plan alongside a red-hot stock, isn’t what past memory cycles looked like.

Rather than expanding manufacturing lines to chase short-term price spikes, the company has tied incremental output directly to locked-in, multiyear customer commitments.

In Cramer’s assessment, that restraint changes the math: it prevents the kind of oversupply that has wrecked recoveries before. Storage suppliers are prioritizing earnings per share over volume.

As long as hyperscalers keep spending at their current pace, STX’s approach to cash offers “real” protection against swings that have defined this business for decades.

Cramer’s “Investing Club”  has recently initiated a position in Micron stock – which has already soared over 250% this year.

Importantly, the former hedge fund manager believes MU could roughly double again if artificial intelligence hardware demand and long-term supply contracts hold, and there is now an unexpected slowdown in data-center spending.

The bullish call rests on one key assumption – memory stays a “genuine” bottleneck for advanced computing clusters. If it does, the biggest suppliers keep real pricing power.

Much like its peers, Micron is also anchoring factory utilization to multiyear commitments rather than short-term signals, limiting margin compression that plagued chipmakers during past downcycles.

The risk is real; a stall in hyperscale spending will change the calculus fast. But absent that, MU’s discipline should turn today's pricing into years of cash generation, not a one-time spike.

Western Digital’s board has just added to its buyback plan as well. Shares have more than tripled year-to-date, and the company authorized another$4 billion in repurchases earlier this year.

Again, pairing bigger cash returns with expanding margins marks a real break from prior cycles – when windfall profits got plowed into speculative new plants.

Sending cash to shareholders instead of chasing market share fits a sector-wide pattern: discipline over expansion.

For WDC shares as well, an abrupt slowdown in data-center buildouts remains a latent risk for the storage supply chain. And Cramer doesn’t dismiss it; he just doesn’t see it as immediate.

With enterprise demand locked in and spending held in check across the industry, Western Digital looks positioned to hold its valuation without the oversupply traps that have caught this sector before.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Jim Cramer used his Monday CNBC segment to make an aggressive call on the year’s most explosive corner of the market: memory and storage. “Sometimes the opportunity is too great and you can’t afford not to take it.” He paired that framing with a specific prediction on Micron Technology (NASDAQ:MU | MU Price Prediction): “I think Micron can double again before the boom comes to an end, assuming there’s no data center slowdown.” That conditional matters.

Cramer’s timing view is that the group has more room to run. “While I acknowledge that I am not early, I do not think I am late.” The Monday close explains the hesitation. SanDisk (NASDAQ:SNDK) finished at $1,786.85, up 8.88% Monday, up 652.74% year to date, and up 44.34% over the past week. Seagate Technology (NASDAQ:STX) closed at $994.79, up 2.19% Monday, up 262.15% year to date, and up 24.20% over the past week. Micron closed at $1,011.75, up 4.13% Monday, up 254.71% year to date, and up 17.51% over the past week. Western Digital (NASDAQ:WDC) closed at $536.01, up 5.35% Monday, up 211.39% year to date, and up 22.28% over the past week.

Why Memory Has Historically Been a Trap Every prior memory boom has ended the same way. Manufacturers, seeing rising prices, aggressively add fab capacity. Supply swamps demand, prices collapse, and stocks give back years of gains in months (riding a mania is fine as long as you plan the exit, and our free Bubble Survivor’s Handbook covers both halves). Cramer’s point is that assuming this pattern must repeat can itself be the bigger mistake this time.

Cramer’s Case That This Cycle Is Different His argument rests on two pillars. On demand, he cited Elon Musk’s public comments on X identifying memory as the key bottleneck to AI data center growth. On supply, he argued that memory makers are “basically building only to suit,” signing long-term customer agreements that lock in margins rather than chasing volume. Micron’s June earnings call fits that picture, with management describing 16 Strategic Customer Agreements covering roughly 20% of DRAM volume and a third of NAND volume and cumulative minimum-price contract value of approximately $100 billion.

Cramer also pointed to buybacks as evidence that cash is not going into new capacity. SanDisk has $15.5 billion remaining under its repurchase authorization per its recent Q4 8-K. Seagate is working through a $5 billion buyback program announced in 2025, and Western Digital authorized an additional $4 billion in repurchases earlier in 2026. His framing: “They’re taking that money and sending it to you, the shareholder, rather than investing in new capacity.”

The Micron Thesis and the Risk Cramer’s Charitable Trust recently initiated a position in Micron, which he favors for growth. He acknowledges the tail risk. His response: “I can’t see the overbuild happening any time soon, so why not own one of these memory stocks.”

An Independent Voice Pointing the Same Direction Separately, on August 15, 2026, New Street Research analyst Pierre Ferragu upgraded Micron to Buy from Neutral with a $1,250 price target, representing roughly 32% upside from Micron’s Thursday August 13 close of $949.83. Micron has risen since, narrowing that gap. Ferragu’s argument is that investors should stop valuing Micron “like old Micron,” because HBM consumes roughly 3x the wafer capacity of standard DDR5 DRAM, limiting spillover during a downturn. He projects Micron could generate more than $150 billion in annual free cash flow by 2030, supporting a potential $2 trillion to $3 trillion market cap.

The Counterweight Analyst consensus on Micron is Strong Buy with 9 strong buy, 31 buy, 5 hold, 0 sell, 0 strong sell and a $1,501.98 average 12-month price target. Context worth flagging: Micron’s 52-week high is $1,254.81 and its 52-week low is $113.28, so Ferragu’s target sits close to a level the stock has already visited. Micron’s market cap is about $1.03 trillion, and its beta is 2.213.

Our valuation model rates Micron a HOLD with a base target of $973.75, below Monday’s close, calling it near fair value. Its conservative scenario is $712.21 and its optimistic scenario is $1,335.12, with a five-year base target of $1,059.41 and optimistic five-year scenario of $1,974.51. Cramer and the Street see substantial further upside. Our model sees a stock that has largely priced in the good news. The gap between those views is the actual risk a buyer takes.

Cramer’s anchor sentiment stands with the caveat baked in: the entire case rests on AI and data center demand not slowing. If it holds, the opportunity may be too great to pass on. If it does not, the historical pattern reasserts itself. This is not investment advice.

Contact [email protected] for any questions or corrections.

Key Takeaways Western Digital's cloud revenue surged 43% as demand for higher-capacity nearline drives strengthened.Higher-capacity sales and better pricing lifted WDC's gross margin by 1,310 bps year over year.WDC expects fiscal Q1 2027 revenue of $4.1 billion, up 45% year over year. Western Digital Corporation (WDC - Free Report) has entered fiscal 2027 with a favorable combination of strong storage demand, improving pricing and better visibility across its key end markets – Cloud, Consumer and Client. Its latest performance suggests that the recovery in its HDD business is gaining broader momentum, while the rapid expansion of AI and cloud infrastructure is creating a structural driver of demand for high-capacity storage.

Cloud is the centerpiece of WDC’s growth strategy. In the fourth quarter of fiscal 2026, cloud revenue accounted for 89% of total revenue. It rose 43% year over year to $3.3 billion, driven by strong demand for higher-capacity nearline drives and a more favorable pricing environment. Improving pricing is also helping WDC translate stronger storage volumes into better profitability. WDC reported a non-GAAP gross margin of 54.4%, up 1,310 basis points (bps) year over year. Higher-capacity drive sales, improved pricing and manufacturing discipline boosted results, with the average price per terabyte increasing from the high single digits to the high teens year over year. If WDC can maintain pricing discipline while continuing to introduce higher-capacity products, margin expansion could remain an important earnings catalyst.

Although Cloud remains dominant, WDC is seeing encouraging trends across its other end markets. Revenues from the Client end market were up 61% year over year, while the Consumer end market rallied 38%. Both markets benefited from stronger exabyte growth and improved pricing. Fueled by robust demand, improving long-term visibility and favorable pricing across its end markets, WDC anticipates first-quarter fiscal 2027 revenues of $4.1 billion (+/- $100 million), up 45% year over year.

However, competition is another consideration. Seagate Technology (STX - Free Report) remains a formidable rival, particularly in high-capacity HDDs and emerging HAMR technology. Any improvement in competitors' supply or technology could put pressure on pricing.

Can WDC Outpace Seagate and Other Storage Rivals?Seagate is banking on strong data center demand, HAMR adoption and pricing discipline. Management expects cloud spending and AI-led storage demand to remain healthy. Demand visibility remains strong, with most nearline capacity allocated through 2028 and customer commitments extending into 2029. Seagate expanded non-GAAP gross margin for the 13th consecutive quarter as fiscal fourth quarter non-GAAP gross margin reached 52.7%, up 1,480 bps year over year. Driven by HDD demand, AI adoption, the Mozaic rollout and disciplined pricing, it expects fiscal first-quarter revenue at $4.1 billion (+/-100 million), up 56% year over year at the midpoint. 

Super Micro Computer (SMCI - Free Report) profitability continues to vary sharply with customer and product mix. Non-GAAP gross margin rose to 17.6% in fourth-quarter fiscal 2026 from 10.1% in the prior quarter, but management said about 75% of the sequential improvement came from favorable mix, including contracts that shifted into fiscal 2027. Lower tariff costs and inventory reserves accounted for the rest. For first-quarter fiscal 2027, management expects gross margin of only 10.4% to 10.8%, indicating that the fourth-quarter level is not expected to persist. AI solutions accounted for approximately 60% of revenues compared with more than 80% in the prior quarter, primarily because of the timing of large AI project ramps.

WDC Price Performance, Valuation and EstimatesIn the past year, shares of WDC have surged 566.9% compared with the Zacks Computer-Storage Devices industry’s growth of 460.5%.

Image Source: Zacks Investment Research

Going by the price/earnings ratio, the company’s shares currently trade at 23.62 forward earnings compared with 10.03 for the industry.

Image Source: Zacks Investment Research

WDC’s estimate revisions are currently on an upward trajectory. The Zacks Consensus Estimate for WDC’s earnings for fiscal 2027 has been revised upward by 9.3% to $20.03 over the past 60 days, while the same for fiscal 2028 has gone up 7.6% to $34.74.

Image Source: Zacks Investment Research

Currently, Western Digital has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fielder Capital Group LLC purchased a new stake in shares of Western Digital Corporation (NASDAQ: WDC) during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund purchased 1,462 shares of the data storage provider's stock, valued at approximately $934,000. Other

Investors might want to bet on Western Digital (WDC - Free Report) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.

A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.

Since a changing earnings picture is a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may find it difficult to make decisions based on rating upgrades by Wall Street analysts, as these are mostly driven by subjective factors that are hard to see and measure in real time.

Therefore, the Zacks rating upgrade for Western Digital basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.

Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Western Digital imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.

Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for Western DigitalThis maker of hard drives for businesses and personal computers is expected to earn $20.03 per share for the fiscal year ending June 2027, which represents no year-over-year change.

Analysts have been steadily raising their estimates for Western Digital. Over the past three months, the Zacks Consensus Estimate for the company has increased 17.6%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Western Digital to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.

Copyright 2026 Zacks Investment Research 101 N Wacker Drive, Floor 15, Chicago, IL 60606

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +23.94% per year. These returns cover a period from January 1, 1988 through July 6, 2026. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer.

Visit Performance Disclosure for information about the performance numbers displayed above.

Visit www.zacksdata.com to get our data and content for your mobile app or website.

Real time prices by BATS. Delayed quotes by Sungard.

NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.

This site is protected by reCAPTCHA and the Google Privacy Policy, DMCA Policy and Terms of Service apply.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Memory and storage stocks are extending a sharp rebound into Thursday afternoon trading, with SanDisk (NASDAQ:SNDK | SNDK Price Prediction) shares up 15% to $1,550 and SK Hynix (NASDAQ:SKHY) shares climbing 9% to $168. Western Digital (NASDAQ:WDC) shares are rising 7% to $487, leading a broad bid across the storage stack.

Meanwhile, Micron Technology (NASDAQ:MU) stock is gaining 6% to $964, and Seagate Technology (NASDAQ:STX) shares are advancing 5% to $922. For fund followers, the Roundhill Memory ETF (NASDAQ:DRAM) is up 5% to $57 and change.

The Rally Started in Seoul The move began well before SanDisk’s investor day. Korea’s Kospi surged 4% overnight on AI infrastructure optimism, with SK Hynix stock up 6% and Samsung Electronics stock up 5% in Seoul.

The Kospi now sits 23% above its July 30 low, and that Korea-led rotation into memory was already lifting the group before U.S. markets opened. SanDisk’s multi-year financial model unveiled at its investor day landed on top of an already-rising cohort rather than creating the move by itself.

The fundamentals of these memory/storage large-caps support the bid. For example, SanDisk reported Q4 FY2026 revenue of $8.96 billion, up 371.6% year over year, while SK Hynix’s Q2 revenue jumped 256.8% on HBM demand.

A Bounce Inside a Drawdown Even with these immediate-term price bounces, it’s important to consider the bigger picture. Through Wednesday’s close, SanDisk stock was down 20% over the prior month. Also, Western Digital stock had fallen 18% over the prior month.

Micron stock sits up 237% year to date, but the memory/storage group as a whole has been working its way out of a rough few weeks. Today’s gains represent a bounce off of recent volatility, and that framing matters for how investors size their positions.

Seagate stock joining the move is notable. It broadens the story from a NAND flash bid into the full storage stack, hard drives included, with Seagate CEO Dave Mosley recently citing “durable long-term demand for mass capacity storage” as AI accelerates data generation.

The SanDisk-SK Hynix Link The day’s two strongest names are also linked commercially. On August 3, SanDisk and SK Hynix announced a collaboration on High Bandwidth Flash (HBF), a technology aimed at AI inference workloads that require far more memory capacity than current architectures deliver.

The Roundhill Memory ETF captures this basket in one line. Per its fact sheet dated May 11, the DRAM ETF’s top positions were Samsung Electronics at 25%, SK Hynix at 24.2%, and Micron at 23.8%, with SanDisk at 4.7% and Seagate at 4.5%. The fund’s expense ratio is 0.65%.

What to Watch Now A single-day rally doesn’t necessarily mean the bulls will continue to charge ahead. Investors can watch for whether the Korea-led bid carries into Friday’s Seoul session, whether Seagate and the hard-drive side keep pace with the flash names, and whether this group can close the month-long gap it’s still climbing out of.

A cohort that just fell 20% in a month can move violently in both directions. Position sizing should reflect that volatility, even as the AI-driven demand narrative continues to firm. The next anticipated indicator arrives with Friday’s Asia session and, further out, Micron’s Q4 FY2026 report.

Contact [email protected] for any questions or corrections.

13.8.2026 16:25, CSCO, SMCI, CBRS

Index Dow Jones +0,48 % na 54030,82 b., S&P 500 +0,81 % na 7811,27 b., Nasdaq Composite +0,96 % na 26843,3 b.

Americké akcie otevírají předposlední obchodní seanci týdne pozitivně naladěny, když všechny hlavní indexy posilují. Sentiment trhu podpořila slabší než očekávaná inflační data z USA, která podle Bloombergu posílila očekávání, že Fed v září sazby nezvýší. Stále ještě probíhá výsledková sezóna.

Investoři očekávali například výsledky za 4Q fiskálního roku 2026 výrobce síťových zařízení Cisco Systems (-7,1 %). Tržby i očištěný zisk na akcii překonaly odhady analytiků. Společnost zároveň představila výhled na fiskální rok 2027 nad konsensem trhu. Investory však zklamal výhled tržeb spojených s AI datovými centry, který podle analytika UBS vyznívá „velmi, velmi konzervativně“.

Dále reportovala Cerebras Systems (-10,1 %), která navrhuje obrovské čipy a staví specializované systémy pro trénování a provoz rozsáhlých modelů umělé inteligence. Očištěné tržby i celoroční výhled ve 2Q překonaly konsensus analytiků, tahounem byl cloudový byznys, jehož tržby se meziročně téměř zčtyřnásobily. Investorům ale zřejmě nestačil výhled vzhledem k vysokému ocenění.

Anthropic podle lidí obeznámených se situací jedná o převzetí startupu Decart AI za přibližně 6 mld. USD.

Dále se daří akciím výrobci serverů Super Micro Computer (+9,5 %), které rostly již včera (+19 %) poté, co společnost v úterý po trhu zveřejnila kvartální výsledky.

Index S&P 500 +0,81 % na 7811,27 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Komunikační služby +1,5 % Energie -0,7 % Reality +1,3 % Průmysl -0,2 % Informační technologie +1,2 % Základní materiály -0,2 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Super Micro Computer (SMCI) +9,5 % Tapestry (TPR) -16 % Western Digital Corp (WDC) +5,6 % Cisco Systems (CSCO) -7,1 % Robinhood Markets (HOOD) +5,2 % Newmont Corp (NEM) -2,3 % Marvell Technology (MRVL) +4,9 % Ralph Lauren Corp (RL) -2,1 % Hewlett Packard Enterprise (HPE) +4,8 % Baker Hughes (BKR) -2,0 %
Zdroj: Bloomberg

Marek Krejčiřík
Fio banka, a.s.
Prohlášení

Key Takeaways WDC delivered $3.5B in fiscal 2026 FCF, a 27% margin, with Q4 FCF reaching $1.3B.Revenues rose 36% to $12.9B as exabyte shipments, pricing and high-capacity drives boosted results.WDC expects Q1 fiscal 2027 revenues of $4.1B at the midpoint, up 45% year over year. Western Digital Corporation (WDC - Free Report) delivered an impressive $3.5 billion in free cash flow (“FCF”) for fiscal 2026, representing a 27% FCF margin. In the fiscal fourth quarter alone, FCF reached $1.3 billion, translating into a solid 34% margin. This robust performance highlights the company’s ability to convert earnings into cash efficiently, while providing flexibility in capital allocation.

WDC’s fiscal 2026 revenues increased 36% to $12.9 billion, driven by strong exabyte shipments and pricing tailwinds. Gross margin expanded 970 basis points (bps) to 49.1% and operating margin improved 1,290 bps to 37.3%. Favorable mix of high-capacity drives, pricing and efficient execution across manufacturing operations cushioned margin performance.

Western Digital also demonstrated a clear commitment to returning value to its shareholders. The company returned $3.1 billion to its shareholders in fiscal 2026. During the fiscal fourth quarter, it repurchased $1 billion of stock and paid $54 million in dividends. The company ended the quarter with $1.6 billion in cash and $1.1 billion in debt, leading to a $500 million net positive cash position at the fiscal year-end.

Looking ahead, management noted that it remains confident about the company’s long-term prospects, along with margin and cash flow expansion amid a rapid increase in cloud and other data-intensive workloads.

Buoyed by strong demand trends, WDC expects fiscal first-quarter non-GAAP revenues of $4.1 billion (+/- $100 million), up 45% year over year at the midpoint.
With strong demand visibility, improving pricing and a technology roadmap spanning 40TB ePMR and upcoming 44TB HAMR products, WDC appears well positioned to sustain robust FCF generation in fiscal 2027.

However, cash-flow generation will hinge on the company’s ability to maintain pricing while converting strong demand into margin expansion. It also needs to watch out for intense competition in the space from the likes of Seagate Technology (STX - Free Report) and NetApp (NTAP - Free Report) , who are also vying for a larger share of the data storage market.  

Strong FCF Numbers of CompetitorsSeagate is one of WDC’s closest competitors. Like WDC, STX is also witnessing rapid top-line growth amid the AI boom. Fiscal fourth-quarter non-GAAP revenues of $3.6 billion increased 48% year over year. The data center segment accounted for 81% of total revenues, at $2.9 billion, representing a 17% sequential increase and 57% year-over-year growth. Non-GAAP operating profit climbed 39% sequentially to $1.6 billion, with a 44.6% operating margin.

Cash flow from operations during the fiscal fourth quarter was $1.3 billion compared with $1.1 billion in the previous quarter. Free cash flow increased 17% sequentially and 163% year over year to $1.1 billion. Seagate expects sequential cash flow growth in fiscal 2027, supported by strong demand, operational efficiency and disciplined capital spending.

NetApp continues to benefit from demand for modern all-flash arrays that support enterprise modernization and AI workloads. The company’s business model continues to generate sizable cash flow that supports investment and capital returns. In the fiscal fourth quarter, operating cash flow was $950 million and free cash flow was $900 million, while fiscal 2026 free cash flow was $1.87 billion.

Non-GAAP operating margin for fiscal 2026 was 30.2%, up 190 basis points year over year. The company returned $1.36 billion to shareholders in fiscal 2026 through dividends and repurchases, and increased its share repurchase authorization by $1 billion. Management expects to return up to 100% of free cash flow to its shareholders in fiscal 2027 and to reduce share count by a low single-digit percentage year over year.

WDC Price Performance, Valuation and EstimatesIn the past month, shares have tanked 17.7% compared with the Zacks Computer-Storage Devices industry’s decline of 18.6%.

Image Source: Zacks Investment Research

In terms of forward price/earnings, WDC’s shares are trading at 21.04X, higher than the industry’s 9.1X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for WDC’s earnings for fiscal 2027 has been revised up roughly 5% to $18.85 over the past 60 days.

Image Source: Zacks Investment Research

Currently, Western Digital holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Western Digital's Q4 revenues rose 44% as strong storage demand fueled top-line growth. WDC expects Q1 FY27 revenues of $4.1B and gross margins of 55%-56%, signaling continued momentum.Strong cash flow and margin expansion could support WDC's earnings growth and further share-price upside. With the rise of artificial intelligence (AI), NVIDIA Corporation (NVDA - Free Report) has emerged as a prime beneficiary, with its shares soaring and helping the company surpass a $5-trillion market capitalization. The rally has been fueled by incessant demand for NVIDIA’s advanced chips and CUDA software platform.  

Given NVIDIA’s remarkable AI-driven growth, investors would be tempted to buy the stock. However, NVIDIA’s gains have been subdued this year, up only 16.7%. Even though the broader tech sector has remained resilient, investors are increasingly concerned about a potential slowdown in AI spending and its impact on NVIDIA’s earnings, which have so far remained phenomenal.  

Tighter restrictions on chip exports to China and stiff competition could also weigh on NVIDIA’s growth trajectory. Against this not-so-encouraging backdrop, investors should consider other beneficiaries in the AI ecosystem, such as Western Digital Corporation (WDC - Free Report) , whose shares have surged 154.5% this year and have further room to scale upward.  

Western Digital continues to benefit from AI-driven demand for high-capacity data storage. Let’s explore in detail why Western Digital could be a smart buy now –  

WDC’s AI Tailwinds and Earnings Growth Create Further Upside Western Digital recently reported revenues of $3.75 billion in the fiscal fourth quarter of 2026, up 44% from a year ago, according to the company’s press release. The company’s top-line growth isn’t due to cost-cutting or acquisitions; it is primarily driven by strong demand for storage products.  

Further, the company expects revenues of $4.1 billion for the first quarter of fiscal 2027, plus or minus $100 million. At the midpoint, this would represent 42-49% year-over-year growth, indicating that revenue growth is expected to carry into fiscal 2027, and the robust performance reported last quarter wasn’t just a temporary surge. 

As storage continues to become a strong component of the AI infrastructure buildout, Western Digital is poised to gain further. The company is therefore forecasting a healthy non-GAAP gross margin of 55-56% for the fiscal first quarter of 2027, up from 54.4% reported in the fiscal fourth quarter of 2026. 

Further, margin expansion, along with strong revenue growth, could enhance Western Digital’s operating leverage, translating into faster growth in operating income and earnings. The company has generated a strong free cash flow of $1.28 billion in the fiscal fourth quarter of 2026, providing the company greater financial flexibility to reinvest in research and development, strengthen the balance sheet, and fund growth initiatives. 

Hence, strong revenue growth, margin expansion and robust cash flow are expected to continue to boost Western Digital’s earnings growth and support further upside in its share price. Brokers also see greater upside potential in Western Digital. 

The average short-term price target for WDC stock is $664.77, representing a 53.1% upside from its last closing price of $434.30. The highest price target stands at $1,050, suggesting a potential upside of 141.8%.

 

Image Source: Zacks Investment Research

Therefore, it’s prudent for investors to place bets on Western Digital at the current levels to capitalize on its upside potential. Consequently, the company’s expected earnings growth rate for the current year is 84.4%. The Zacks Consensus Estimate of $18.85 for WDC’s earnings per share is up 165.1% year over year.

 

Image Source: Zacks Investment Research

Western Digital currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.