What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 4% in the morning session after Cantor Fitzgerald nearly doubled its price target on the stock to $160 from $85, while maintaining an Overweight rating.
This significant adjustment signaled strong confidence from the analyst firm. The positive sentiment was part of a broader trend where the artificial intelligence boom lifted traditional storage companies. The surge in AI has increased the demand for computing infrastructure, benefiting firms like Western Digital that supply crucial storage solutions for large language models. Reflecting this trend, the company's stock had already soared 137% since the AI boom began.
After the initial pop the shares cooled down to $111.85, up 4.9% from previous close.
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What Is The Market Telling Us
Western Digital’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 4.6% on the news that the company announced it is immediately increasing prices across its entire range of hard disk drives (HDDs), citing unprecedented demand.
Western Digital is the third major storage manufacturer to raise prices, a move prompted by what it calls "sky-high demand for every capacity in its portfolio." This surge is reportedly driven by tech giants like Google and Oracle aggressively expanding their AI infrastructure, leading to substantial growth in demand for high-capacity storage. Industry sources indicate that lead times for these high-capacity HDDs have now stretched to almost a year. However, the company noted a switch to sea freight could add six to ten weeks to shipping times. Reinforcing the positive investor sentiment, Benchmark analysts raised their price target on the stock to $115 from $85, maintaining a Buy rating.
Western Digital is up 80.8% since the beginning of the year, and at $111.85 per share, has set a new 52-week high. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $3,067.
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