Western Digital (NASDAQ:WDC) Trading Down 7.4% – What’s Next?

Shares of Western Digital Corporation (NASDAQ:WDC) fell 7.4% during mid-day trading on Tuesday . The company traded as low as $490.23 and last traded at $496.16. 9,262,249 shares traded hands during trading, an increase of 4% from the average daily volume of 8,937,651 shares. The stock had previously closed at $536.01.

Key Headlines Impacting Western Digital

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital continues to benefit from strong storage demand, improving pricing and AI-related cloud growth. Analysts also point to favorable earnings-estimate revisions and a forecast-beating outlook as potential support for the long-term investment case. Can Strong End Markets and Pricing Tailwinds Keep WDC’s Momentum Alive
• Positive Sentiment: Memory and storage stocks rallied recently after Elon Musk highlighted a potential memory bottleneck, reinforcing expectations that AI infrastructure demand could remain constrained by limited supply. Western Digital also received support from broader sector momentum and positive commentary about its earnings outlook. SanDisk Rallies as Elon Musk Flags a Memory Bottleneck
• Neutral Sentiment: Recent coverage remains broadly bullish on momentum, with commentators including Jim Cramer arguing that demand for memory and storage tied to AI could support additional gains. However, the sector’s historical boom-and-bust cycle makes the outlook highly sensitive to supply, pricing and economic conditions. Jim Cramer Says It’s Not Too Late to Invest in Memory Stocks
• Negative Sentiment: Rising Treasury yields are pressuring high-growth technology shares and prompting investors to reduce exposure to the extended AI hardware trade. Memory and storage peers, including SanDisk and Micron, are also selling off, creating additional pressure on WDC. Higher Rates Test the Memory Boom
• Negative Sentiment: A Wall Street Journal report concerning potentially undisclosed or underestimated AI-related spending commitments has intensified caution around AI hardware valuations and accelerated the rotation away from memory stocks. WSJ Report Sends Memory Stocks Down

Analyst Ratings Changes

A number of equities analysts have recently commented on WDC shares. Summit Insights lowered Western Digital from a “buy” rating to a “hold” rating in a report on Thursday, August 6th. Morgan Stanley reiterated an “overweight” rating and set a $676.00 price objective on shares of Western Digital in a research note on Thursday, August 6th. Bank of America increased their price objective on Western Digital from $610.00 to $732.00 and gave the stock a “buy” rating in a report on Wednesday, July 1st. UBS Group cut their target price on Western Digital from $560.00 to $525.00 and set a “neutral” rating for the company in a research note on Thursday, August 6th. Finally, Fox Advisors lowered Western Digital from an “overweight” rating to an “equal weight” rating in a report on Monday, June 22nd. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and five have given a Hold rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $534.56.

Western Digital Trading Down 7.4%

The company’s fifty day simple moving average is $556.51 and its 200 day simple moving average is $428.76. The stock has a market capitalization of $171.02 billion, a P/E ratio of 20.49 and a beta of 2.14.

Western Digital (NASDAQ:WDC) last released its quarterly earnings results on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share for the quarter, topping the consensus estimate of $3.31 by $0.25. Western Digital had a net margin of 72.95% and a return on equity of 48.15%. The firm had revenue of $3.75 billion for the quarter, compared to analysts’ expectations of $3.70 billion. During the same quarter in the prior year, the firm posted $1.66 earnings per share. The business’s quarterly revenue was up 43.8% on a year-over-year basis. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. Equities research analysts predict that Western Digital Corporation will post 19.65 earnings per share for the current year.

Western Digital Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 17th. Shareholders of record on Tuesday, September 8th will be paid a $0.15 dividend. This represents a $0.60 dividend on an annualized basis and a yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital’s dividend payout ratio is currently 2.48%.

Insiders Place Their Bets

In other Western Digital news, insider Vidyadhara K. Gubbi sold 2,475 shares of the firm’s stock in a transaction dated Monday, June 1st. The stock was sold at an average price of $556.24, for a total value of $1,376,694.00. Following the sale, the insider owned 85,154 shares of the company’s stock, valued at $47,366,060.96. This trade represents a 2.82% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, CEO Irving Tan sold 20,000 shares of Western Digital stock in a transaction dated Tuesday, August 11th. The shares were sold at an average price of $444.97, for a total value of $8,899,400.00. Following the sale, the chief executive officer owned 575,966 shares of the company’s stock, valued at approximately $256,287,591.02. This trade represents a 3.36% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 25,093 shares of company stock worth $11,650,737. 0.18% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Western Digital

Several hedge funds have recently bought and sold shares of the stock. Livforsakringsbolaget Skandia Omsesidigt purchased a new position in Western Digital in the 2nd quarter worth approximately $1,379,000. Rakuten Investment Management Inc. purchased a new stake in shares of Western Digital during the 2nd quarter valued at $54,187,000. Empowered Funds LLC purchased a new stake in shares of Western Digital during the 2nd quarter valued at $97,517,000. United Capital Financial Advisors LLC bought a new stake in shares of Western Digital during the 2nd quarter worth $8,549,000. Finally, Value Aligned Research Advisors LLC bought a new stake in shares of Western Digital during the 2nd quarter worth $631,329,000. 92.51% of the stock is currently owned by institutional investors.

About Western Digital

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.