Western Digital (WDC) Stock Soars 15% as Wall Street Analysts Set $650 Price Target

Key Takeaways

• Shares of WDC reached a 52-week peak of $655, settling at $628.74 following JPMorgan’s price target increase to $650
• Morgan Stanley maintained its Overweight stance while raising its price objective to $650, naming WDC among its top preferred stocks
• The stock jumped approximately 15% in Monday’s session, leading all S&P 500 components
• Third-quarter results exceeded expectations: earnings per share of $2.72 versus the anticipated $2.39; revenues climbed 45.5% year-over-year to $3.34 billion
• Industry forecasts indicate HDD supply will trail demand by 10–15% in 2026, with artificial intelligence generating 40–50% yearly demand expansion

Shares of Western Digital (WDC) reached a new 52-week peak during Monday’s trading session, climbing nearly 15% with an intraday high of $655 after touching $645.33, positioning the stock as the S&P 500’s strongest performer. This represented a significant jump from the previous closing price of $562.92.

Western Digital Corporation, WDC

The rally followed JPMorgan Chase’s decision to elevate its price objective on WDC from $530 to $650 while keeping its Overweight recommendation intact. Shortly after, Morgan Stanley issued a similar upgrade, increasing its target from $488 to $650 and confirming its Overweight rating.

Erik Woodring, an analyst at Morgan Stanley, highlighted Western Digital alongside Seagate as his “most-favored Overweights,” emphasizing the hard disk drive sector’s inability to meet surging demand.

The stock has now appreciated more than 1,000% during the past twelve months.

Demand Outpacing Supply Capacity

Morgan Stanley’s analysis indicates HDD supply will lag behind demand by 10% to 15% throughout 2026. Artificial intelligence serves as the primary catalyst, accelerating HDD demand growth to approximately 40% to 50% per year, while production capacity expands at only 30% to 35% annually.

This imbalance is manifesting in pricing power. Western Digital and Seagate currently command approximately $14.30 to $14.90 per terabyte for their storage solutions. Both manufacturers are aiming for $25 to $30 per terabyte pricing between 2027 and 2028.

Samik Chatterjee, an analyst at J.P. Morgan, observed on Friday that Seagate has discontinued promotional discounting to encourage adoption of newer-generation products. Given the constrained supply environment, such incentives have become unnecessary.

Kris Sennesael, Western Digital’s Chief Financial Officer, explained to Barron’s earlier this year that the sector has evolved beyond its traditional cyclical patterns, with clients now securing supply commitments multiple years ahead.

Quarterly Performance Validates Bullish Outlook

Western Digital’s latest financial report reinforced the optimistic analyst perspective. The company delivered earnings per share of $2.72, surpassing the consensus forecast of $2.39 by $0.33.

Topline results reached $3.34 billion, exceeding the $3.25 billion projection and representing a 45.5% increase versus the prior-year period. The company achieved a net margin of 55.29% alongside a return on equity of 42.95%.

Western Digital additionally increased its quarterly dividend payment to $0.15 per share from the previous $0.13, with distribution scheduled for June 17th.

Looking ahead to Q4 2026, management provided EPS guidance ranging between $3.10 and $3.40. Wall Street’s full-year consensus currently stands at $9.60 per share.

Wall Street Maintains Positive Outlook

Beyond the recent upgrades from JPMorgan and Morgan Stanley, multiple other institutions have adjusted their targets upward in recent weeks. Bank of America established a $495 objective with a Buy recommendation. Wells Fargo elevated its target from $500 to $575 while maintaining an Overweight rating. Rosenblatt increased from $340 to $500, also rated Buy. Zacks upgraded the equity to Strong Buy during early May.

The MarketBeat consensus rating stands at “Moderate Buy” with an average price target of $450.46 — substantially below current trading levels.

Morgan Stanley’s optimistic scenario values Western Digital at $920 and Seagate at $1,446 should demand fundamentals and pricing trends exceed current projections.

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