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Why Western Digital (WDC) Is Up 24.6% After Doubling Down On AI-Centric Cloud Storage

Simply Wall St · 4d ago
  • In early January 2026, Western Digital reported surging demand for its high-capacity hard drives used in AI and cloud data centers, following its split from the flash business and sharpened focus on enterprise and hyperscale customers.
  • This shift, reinforced by its addition to the Nasdaq-100 and constrained supply for AI-optimized storage, is increasingly positioning Western Digital as a crucial infrastructure provider for the generative AI buildout.
  • We’ll now examine how Western Digital’s pivot toward AI-driven cloud storage demand may reshape its investment narrative and key assumptions.

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Western Digital Investment Narrative Recap

To own Western Digital today, you need to believe that AI and cloud data centers will keep requiring vast, cost-efficient hard drive storage, and that Western Digital can stay a preferred supplier to hyperscale customers. The recent AI-fueled share price jump and tighter supply backdrop reinforce that the key near term catalyst remains cloud capex and storage pricing, while the biggest current risk is the company’s heavy revenue concentration in a small number of large cloud buyers.

Among recent developments, Western Digital’s addition to the Nasdaq-100 is particularly relevant, as it reinforces the market’s view of the company as a core enabler of AI infrastructure. This index inclusion may magnify short term moves around upcoming earnings and macro data, since passive flows and sentiment around AI spending can both amplify how investors react to any change in cloud storage demand or pricing.

Yet while optimism is high, investors should be aware that customer concentration risk means...

Read the full narrative on Western Digital (it's free!)

Western Digital's narrative projects $11.9 billion revenue and $2.2 billion earnings by 2028. This requires 7.6% yearly revenue growth and around a $0.6 billion earnings increase from $1.6 billion today.

Uncover how Western Digital's forecasts yield a $186.96 fair value, a 15% downside to its current price.

Exploring Other Perspectives

WDC 1-Year Stock Price Chart
WDC 1-Year Stock Price Chart

Five members of the Simply Wall St Community value Western Digital between US$186.96 and US$242.69 per share, reflecting a wide spread of individual views. You may want to weigh those against the current AI driven reliance on a small number of hyperscale customers and what that could mean for Western Digital’s future earnings resilience.

Explore 5 other fair value estimates on Western Digital - why the stock might be worth 15% less than the current price!

Build Your Own Western Digital Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.