Western Digital (NASDAQ:WDC) Stock Price Down 6.9% on Analyst Downgrade

Western Digital Corporation (NASDAQ:WDC)’s stock price traded down 6.9% on Tuesday after Zacks Research downgraded the stock from a strong-buy rating to a hold rating. The stock traded as low as $406.81 and last traded at $411.04. 13,345,011 shares traded hands during trading, an increase of 54% from the average session volume of 8,649,804 shares. The stock had previously closed at $441.64.

A number of other research analysts have also recently commented on WDC. Citigroup cut their price target on shares of Western Digital from $800.00 to $740.00 and set a “buy” rating on the stock in a report on Friday, August 7th. Wall Street Zen lowered shares of Western Digital from a “strong-buy” rating to a “buy” rating in a report on Sunday, August 16th. Melius Research set a $1,050.00 target price on shares of Western Digital and gave the stock a “buy” rating in a research note on Monday, June 29th. TD Cowen lifted their price target on shares of Western Digital from $500.00 to $540.00 and gave the company a “buy” rating in a research note on Thursday, August 6th. Finally, Bank of America boosted their price target on Western Digital from $610.00 to $732.00 and gave the company a “buy” rating in a report on Wednesday, July 1st. One research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $534.56.

Insider Buying and Selling

In other news, insider Vidyadhara K. Gubbi sold 1,795 shares of the business’s stock in a transaction on Friday, September 4th. The stock was sold at an average price of $459.87, for a total value of $825,466.65. Following the completion of the transaction, the insider directly owned 80,571 shares of the company’s stock, valued at approximately $37,052,185.77. The trade was a 2.18% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CEO Irving Tan sold 20,000 shares of the company’s stock in a transaction on Tuesday, August 11th. The stock was 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 $256,287,591.02. This trade represents a 3.36% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 25,437 shares of company stock valued at $11,461,345 over the last 90 days. Corporate insiders own 0.18% of the company’s stock.

Western Digital News Roundup

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

• Positive Sentiment: AI data centers are creating substantial demand for economical, high-capacity HDD storage. Western Digital’s recent earnings showed strong momentum, with revenue up 43.8% year over year and EPS exceeding analyst expectations. Seagate vs. Western Digital: Which HDD Stock Has More Room to Run?
• Positive Sentiment: Western Digital has successfully navigated severe historical pricing pressure and restructuring efforts, while the AI-storage cycle has significantly improved the long-term growth narrative. Western Digital Crushed the S&P 500 Over 10 Years. Now AI Is Changing Everything
• Neutral Sentiment: The bullish AI-storage thesis remains concentrated among a small group of major customers, which reportedly accounts for about 89% of revenue. That concentration could amplify both growth and demand-related risks.
• Negative Sentiment: Toshiba’s plan to nearly double HDD production for AI data centers is raising concerns that future supply growth could pressure pricing and weaken Western Digital’s competitive position. Is Western Digital Fully Valued After Toshiba’s HDD Expansion Plan?
• Negative Sentiment: Investors are also reacting to reported competition between Seagate and Toshiba for TDK’s magnetic-head business, an asset viewed as strategically important to HDD production. The bidding uncertainty has added volatility across the storage sector. Seagate and Western Digital Drop. The Hot Tech Stocks Have a Big Toshiba Problem
• Negative Sentiment: Western Digital has lagged flash-memory peers whose production is sold in advance, leaving its earnings more exposed to spot-market pricing and supply-demand swings. Zacks Research also lowered its rating from “strong buy” to “hold.” Western Digital Rating Lowered to Hold at Zacks Research

Institutional Inflows and Outflows

Several large investors have recently modified their holdings of WDC. Handelsbanken Fonder AB grew its holdings in Western Digital by 71.4% in the 2nd quarter. Handelsbanken Fonder AB now owns 230,578 shares of the data storage provider’s stock valued at $147,275,000 after buying an additional 96,078 shares in the last quarter. OMERS ADMINISTRATION Corp acquired a new position in shares of Western Digital during the 2nd quarter valued at about $19,694,000. NewEdge Wealth LLC acquired a new position in shares of Western Digital during the 2nd quarter valued at about $14,466,000. OneAscent Financial Services LLC purchased a new stake in shares of Western Digital in the second quarter valued at about $1,599,000. Finally, Focus Partners Advisor Solutions LLC acquired a new stake in Western Digital during the second quarter worth about $8,307,000. Institutional investors own 92.51% of the company’s stock.

Western Digital Stock Down 2.9%

The company’s 50-day moving average is $461.80 and its 200-day moving average is $474.01. The stock has a market capitalization of $147.30 billion, a price-to-earnings ratio of 16.25, a PEG ratio of 1.74 and a beta of 2.11.

Western Digital (NASDAQ:WDC) last posted its quarterly earnings results on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share for the quarter, beating 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 business had revenue of $3.75 billion during the quarter, compared to analysts’ expectations of $3.70 billion. During the same quarter in the prior year, the company posted $1.66 EPS. The business’s revenue for the quarter was up 43.8% on a year-over-year basis. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. Sell-side analysts anticipate that Western Digital Corporation will post 19.65 EPS for the current year.

Western Digital Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th were paid a $0.15 dividend. This represents a $0.60 annualized dividend and a dividend yield of 0.2%. The ex-dividend date of this dividend was Tuesday, September 8th. Western Digital’s dividend payout ratio is 2.48%.

About Western Digital

Western Digital Corporation (NASDAQ: WDC) develops, manufactures and supplies data-storage products and solutions. The company’s portfolio is centered on hard disk drives (HDDs) used in cloud and enterprise data centers, personal computers, network-attached storage systems and other applications that require high-capacity data storage.

Western Digital markets products under brands including Western Digital, WD and Ultrastar. Its offerings include enterprise and data-center HDDs, storage products for business and consumer systems, and related technologies designed to help organizations store, manage and access large volumes of data.

Founded in 1970, Western Digital has evolved from a maker of electronic components into a global data-storage company.