AI Boom Drives Western Digital Toward $500 Target

2 days ago 7

Vandita Jadeja

Tue, May 5, 2026 astatine 9:38 AM CDT 4 min read

Quick Read

Western Digital (WDC) reported Q3 FY2026 non-GAAP EPS of $2.72, beating estimates by 13.71%, with gross rising 45.5% YoY to $3.337 billion, gross borderline crossing 50% for the archetypal clip astatine 50.5%, and escaped currency travel climbing 158% to $978 million, driven by AI workloads crossed training, inference, agentic AI, and carnal AI applications.
Western Digital’s banal surge reflects a structural HDD supply-demand imbalance arsenic hyperscalers perpetrate to high-capacity drives astatine unprecedented scale, with Q4 FY26 guidance calling for 36-44% YoY gross maturation and gross margins of 51-52%.
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Our Western Digital (NASDAQ:WDC) telephone is straightforward: the AI-driven HDD upcycle inactive has country to run, and the stock's parabolic determination higher is supported by accelerating fundamentals. Our 24/7 Wall St. terms people for Western Digital is $512.93, implying 15.95% upside from $442.36 implicit the adjacent 12 months. We complaint WDC a bargain with precocious confidence.

24/7 Wall St. Price Target Summary

Metric

Value

Current Price	$442.36
24/7 Wall St. Price Target	$512.93
Upside	15.95%
Recommendation	BUY
Confidence Level	90%

A Year That Rewrote the Storage Story

WDC has been 1 of the market's astir bonzer performers, rising 894.01% implicit the past year, 156.91% twelvemonth to date, and 10.39% implicit the past week. Shares commercialized astir 5% beneath the 52-week precocious of $446.62, which sits dramatically supra the 52-week debased of $43.41.

The fundamentals warrant overmuch of the move. Q3 FY2026 delivered non-GAAP EPS of $2.72 against a $2.39 estimate, a 13.71% bushed and the 4th consecutive 4th of EPS upside. Revenue roseate 45.5% YoY to $3.337 billion, gross borderline crossed 50% for the archetypal clip astatine 50.5%, and escaped currency travel climbed 158% to $978 million.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Western Digital wasn't 1 of them. Get them present FREE.

CEO Irving Tan attributed the spot to AI workloads, noting "Virtually each AI workload, from training, inference, agentic AI to carnal AI, creates information that is stored persistently and cost-efficiently connected HDDs."

The Case for $594 and Higher

The bull lawsuit rests connected a structural HDD supply-demand imbalance. Hyperscalers are committing to high-capacity drives astatine unprecedented scale, and management's Q4 FY26 guidance calls for gross of $3.65 cardinal (+/- $100M), implying 36% to 44% YoY growth, with gross borderline of 51% to 52% and EPS of $3.25.

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