WDC, STX Maintain Clear Path To Higher Earnings, Says BofA

• BofA raises STX price target to $700 from $605 per share. 
• WDC price target raised to $495 from $415.
• The newly launched DRAM memory ETF has gained nearly 50% since its April 2 launch.

Western Digital (WDC) and Seagate Technology (STX) shares gained on Monday after Bank of America raised their share price targets, citing a clear path to higher earnings going ahead as soaring use of artificial intelligence pushes demand for memory chips. 

"Hard disk drive supply remains tight as manufacturers are not adding unit capacity, and we see this as a structural change," wrote BofA in an investor note. "As such, we continue to see demand exceeding supply and see continued scope for OEMs (original equipment manufacturers) to raise prices."

BofA increased its price target on Seagate to $700 from $605 and on Western Digital to $495 from $415. BofA finds that both companies could see significantly higher earnings per share by 2028 in a bull-case scenario. 

Surging demand from AI data centers has driven shortages and price gains across the industry, which includes memory chip stocks, pushing their stocks higher so far this year. 

“You get this flywheel of more data that’s being used, more data that’s being created, more data that’s being stored,” Kris Sennesael, Western Digital’s chief financial officer, had told Barron’s earlier this year. 

The newly launched memory chip ETF (DRAM) crossed $1 billion in assets under management and has gained nearly 50% since its launch on April 2. 

BoFA Earnings And Share Price Estimates For WDC And STX

BofA estimates 2028 earnings of $29 per share, up from just over $10 on an adjusted basis in 2025 for Seagate. In a bull-case scenario, the brokerage sees potential earnings of $45 per share.

For Western Digital, it estimates earnings of $20 per share in 2028, up from $6.93 per share in 2025. The bull-case scenario puts earnings expectations at $33 per share. 

Retail View 

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘high’ message volumes for WDC and was ‘bullish’ with ‘normal’ message volumes for STX. 

A Stocktwits user sounded extremely optimistic about WDC, STX, and DRAM, saying these stocks are to be held for generations. 

Another user thinks WDC stock should have hit $450 by now. 

WDC has soared 133%, and STX has jumped 113% year-to-date. 

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