WDC Stock Is Up 31% Over The Last Month, But Why Do Analysts See Further Upside?

• Barclays analysts raised their estimates for the hard disk drive market.
• The firm added that, given the dynamics of the sector and Western Digital’s commitment to reduce capital spending, it believes the WDC stock’s re-rating should be “more permanent.”
• Analysts at UBS expect Western Digital to report its third-quarter results near the top end of its guidance, driven by healthy hyperscaler demand.

Shares of Western Digital Corp. (WDC) are up about 31% over the past month, but analysts at Barclays see a further upside in the stock.

According to TheFly, analysts at Barclays hiked their price target for Western Digital to $405 from $325, while keeping an ‘Overweight’ rating on the stock.

Western Digital shares were up nearly 3% in Wednesday’s pre-market trade.

Why Are Analysts Bullish On WDC?

Barclays analysts raised their estimates for the hard disk drive market. The firm added that, given the dynamics of the sector and Western Digital’s commitment to reduce capital spending, it believes the WDC stock’s re-rating should be “more permanent.”

Analysts at UBS also sounded an optimistic tone on Western Digital, hiking their price target to $350 from $285, while maintaining a ‘Neutral’ rating on the stock. The firm expects Western Digital to report its third-quarter (Q3) results near the top end of its guidance.

UBS analysts expect Western Digital’s Q3 performance to be driven by higher average selling prices (ASPs) for its products and healthy hyperscaler demand for storage. They expect further improvement in the fourth quarter (Q4), helping the company notch ASP gains and margin expansion.

The firm stated that storage stocks are cyclical in nature, and the longer-term downcycle has been pushed to at least late 2028, adding that Western Digital's near-term fundamentals remain solid and supported by demand dynamics.

Analysts at BofA hiked their price target for Western Digital last week to $415 from $375, while keeping a ‘Buy’ rating on the stock. The firm cited strong demand for memory as the driver for pricing and gross margin strength.

JPMorgan analysts also hiked their price target for WDC to $400 from $320, while keeping an ‘Overweight’ rating on the stock. The firm stated that AI infrastructure investments would drive the upside for AI-levered suppliers in Q1.

Western Digital’s Earnings Guidance For Q3

Western Digital guided for revenue of $3.2 billion in Q3, with earnings per share (EPS) of $2.3.

Wall Street analysts expect the company to report EPS of $2.36 on revenue of $3.24 billion, according to Fiscal.ai data.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Western Digital trended in the ‘bearish’ territory with message volumes at ‘normal’ levels.

One bullish user stated that retail investors can buy WDC after insiders are done selling their shares.

WDC stock is up 123% year-to-date and 967% over the past 12 months. The S&P 500 ETF (SPY) is up 37% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up  49%.

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