TLDR
- Western Digital (WDC) stock trades near $376 to $379, nearly 50% below its June 18 closing high.
- Analysts expect adjusted EPS of $4.11 and revenue of $4.1 billion, up 47% from last year.
- Morgan Stanley kept an Overweight rating but cut its target to $643 from $676.
- A Nikkei report says Toshiba plans to double its AI data center drive capacity in fiscal 2027.
- Insiders sold $11.0 million of stock in the past three months.
Western Digital (WDC) stock opened at $378.51 on Thursday, the day it reports earnings after the close. Another report put the price at $376.07, nearly 50% below the record close set on June 18.
Western Digital Corporation, WDC
The stock rose about 4% on the day. Even so, it has had a rough second half.
Western Digital is still up roughly 750% since the start of 2024. Its 52-week range runs from $117.23 to $799.87.
Fears of an AI bubble drove much of the drop. Demand for data center hard drives has not gone away, though.
Analysts tracked by FactSet expect adjusted EPS of $4.11 for the September quarter, up from $1.78 a year ago. They also forecast revenue of $4.1 billion, up 47%.
The company’s own guidance called for EPS of 3.850 to 4.150. Management also pointed to revenue growth of 42% to 49%.
Western Digital likes to beat estimates. In August, it posted EPS of $3.56 against a $3.31 forecast.
Revenue that quarter was $3.75 billion versus $3.70 billion expected. Revenue tends to edge past forecasts, while earnings often win by a wide margin.
That means a solid headline number may not move the stock. Investors want more than a beat.
What Wall Street Wants to Hear
Morgan Stanley analyst Erik Woodring says the stock trades at 15 times projected 12-month earnings. That is down from as high as 43 times in June.
He wrote that he sees “no evidence of irrational pricing or capacity behavior.” He wants strong hard-drive pricing guidance for the December quarter.
Morgan Stanley kept an Overweight rating but trimmed its target to $643 from $676. It also named Seagate a “Top Pick.”
Toshiba is the other open question. Nikkei reported that it plans to double its capacity for AI data center drives, and Toshiba declined to comment.
More supply could give customers leverage in contract talks. UBS analyst Timothy Arcuri said hyperscalers plan to push as much volume to Toshiba as they can, though he thinks it will struggle at the high-capacity end.
Targets and Insider Selling
Bank of America raised its target to $800 with a Buy rating. MarketBeat lists a “Moderate Buy” consensus with an average target of $609.56.
The stock sits below its 50-day average of $438.14 and its 200-day average of $480.05. Insiders sold $11.0 million of stock over the past three months, including CEO Irving Tan’s $8.9 million sale in August.
Western Digital reports after the close on Thursday. Investors will listen for hard-drive pricing guidance and any word on Toshiba’s effect on customer talks.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
