Western Digital (NASDAQ:WDC) Stock Falls 4.4% – What’s Next?

Shares of Western Digital Corporation (NASDAQ:WDC) dropped 4.4% during trading on Wednesday. The company traded as low as $362.50 and last traded at $364.10. Approximately 6,649,914 shares were traded during mid-day trading, a decline of 23% from the average session volume of 8,634,195 shares. The stock had previously closed at $380.71.

Western Digital News Summary

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

• Positive Sentiment: Western Digital has exceeded earnings expectations in each of its last five quarters. Its latest report showed $3.56 in earnings per share on $3.75 billion in revenue, while revenue increased 43.8% year over year. Management’s fiscal first-quarter 2027 guidance of approximately $3.85-$4.15 in EPS supports the bullish case. Western Digital Lost One Third Its Value Over 3 Months
• Positive Sentiment: Despite the recent selloff, some analysts remain optimistic about a rebound. The provided analyst data shows a six-month median price target of $597.50, substantially above recent trading levels, although targets may change as market conditions develop.
• Neutral Sentiment: Western Digital is scheduled to report fiscal first-quarter 2027 results on October 22. Investors will focus on whether strong demand, margins and the company’s roughly $4.1 billion revenue outlook can be sustained. Earnings Preview
• Negative Sentiment: China’s ChangXin Memory Technologies is reportedly targeting server memory with a denser chip design. Investors fear that new competition could pressure pricing and margins in the profitable memory and AI-data-center supply chain, weighing on Western Digital along with Micron, Seagate and SK Hynix. CXMT Aims at Server Memory
• Negative Sentiment: UBS lowered its Western Digital price target while maintaining a neutral rating, citing uncertainty over HDD capacity, supply and future pricing. The downgrade increased pressure ahead of earnings. Price-Target Cut and HDD Supply Concerns
• Negative Sentiment: Broader technology stocks are also facing concerns that AI infrastructure spending may not justify current valuations, adding to sector-wide selling. Reported insider activity showing sales and no purchases over the past six months may further dampen sentiment, though it is not necessarily a forecast of business performance.

Analyst Upgrades and Downgrades

Several equities research analysts have recently weighed in on WDC shares. Weiss Ratings lowered shares of Western Digital from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday. Fox Advisors cut Western Digital from an “overweight” rating to an “equal weight” rating in a report on Monday, June 22nd. Melius Research set a $1,050.00 target price on shares of Western Digital and gave the company a “buy” rating in a research note on Monday, June 29th. TD Cowen lifted their price target on Western Digital from $500.00 to $540.00 and gave the company a “buy” rating in a research report on Thursday, August 6th. Finally, Rosenblatt Securities cut their target price on shares of Western Digital from $900.00 to $800.00 and set a “buy” rating for the company in a research note on Thursday, August 6th. One analyst has rated the stock with a Strong Buy rating, twenty have assigned a Buy rating and seven have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus price target of $618.63.

Western Digital Stock Performance

The stock has a market cap of $136.29 billion, a P/E ratio of 15.04, a P/E/G ratio of 1.64 and a beta of 2.11. The company has a 50-day simple moving average of $449.90 and a 200-day simple moving average of $476.64.

Western Digital (NASDAQ:WDC) last announced its earnings results on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share for the quarter, topping analysts’ consensus estimates of $3.31 by $0.25. Western Digital had a net margin of 72.95% and a return on equity of 48.15%. The company had revenue of $3.75 billion during the quarter, compared to the consensus estimate of $3.70 billion. During the same period in the previous year, the firm posted $1.66 earnings per share. The company’s 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. As a group, sell-side analysts expect that Western Digital Corporation will post 19.65 earnings per share for the current fiscal year.

Western Digital Dividend Announcement

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

Insider Transactions at Western Digital

In related news, CEO Irving Tan sold 20,000 shares of Western Digital stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the completion of the sale, the chief executive officer directly owned 575,966 shares of the company’s stock, valued at $256,287,591.02. The trade was a 3.36% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara Gubbi sold 1,795 shares of the stock in a transaction dated Friday, September 4th. The shares were 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 in the company, valued at $37,052,185.77. The trade was a 2.18% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 25,437 shares of company stock worth $11,461,345 in the last three months. Insiders own 0.20% of the company’s stock.

Hedge Funds Weigh In On Western Digital

Several institutional investors and hedge funds have recently made changes to their positions in the company. Legal & General Group Plc acquired a new position in shares of Western Digital during the 2nd quarter worth about $1,602,927,000. Anther Capital Ltd bought a new stake in Western Digital during the second quarter worth about $901,601,000. Deutsche Bank AG bought a new stake in Western Digital during the second quarter worth about $885,565,000. Value Aligned Research Advisors LLC acquired a new position in Western Digital during the first quarter valued at approximately $350,403,000. Finally, Trivest Advisors Ltd acquired a new position in Western Digital during the second quarter valued at approximately $627,606,000. Institutional investors and hedge funds own 92.51% of the company’s stock.

Western Digital Company Profile

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.