From BigGo Finance · BigGo Finance · · 2m
Western Digital Rises 3% as AI Storage Demand Holds
Western Digital shares climb 3% after traders bet AI storage demand survives market selloff.
In brief
Western Digital shares climb 3% after traders bet AI storage demand survives market selloff. Western Digital's stock rose 3% Friday as traders believe AI storage demand remains strong despite recent market declines. Originally reported by BigGo Finance.
Western Digital Shares Rise
Western Digital rose about 3% Friday after a 17% drop, as traders reassessed whether the post-midterm rout in AI memory and storage stocks overshot.
Market Selloff Impact
The Nasdaq 100 fell 6.4% on Thursday, erasing roughly $3.2 trillion in U.S. equity value, with Micron matching Western Digital's decline and SanDisk down 22%.
Analyst Views on AI Buildout
Raymond James chief investment officer Larry Adam sees the AI investment cycle remaining intact, while Yorkville Ives analyst Dan Ives models 10% fewer data centers and a 2027 peak in Big Tech capex.
Fiscal Q1 Results
Western Digital's fiscal first-quarter revenue rose 55% to $4.38 billion with 58.1% gross margin, and fiscal 2027 production is sold out.
Order Book Strength
About 90% of revenue comes from cloud customers, with long-term agreements extending visibility to 2030 and 2031, and fiscal 2027 production already sold out.
Valuation Metrics
Western Digital trades at 12.2 times trailing earnings and 12.8 times fiscal 2027 estimates, falling to 7.95 times for fiscal 2028, against 29.1 times trailing earnings for Seagate.
Analyst Targets
Western Digital carries a Buy consensus rating and an average price forecast of $589.14 across 28 analysts, with targets ranging from $435 to $660.
Market Sensitivity
Customer concentration above 88% of revenue, capital spending near 8% of revenue for two years, and an 11% slide after October's earnings beat leave the stock sensitive to hyperscaler budget changes.
SanDisk Performance
SanDisk dropped 22% and rebounded about 10% in Friday premarket trading, sitting 30% below its 20-day moving average and 41% below its 50-day.
AI Trade Bifurcation
The memory and storage complex now trades on policy headlines as much as order books, with the gap between Seagate's trailing multiple and Western Digital's forward multiple suggesting different durability for earnings streams.
The main idea
Western Digital's stock rose 3% Friday as traders believe AI storage demand remains strong despite recent market declines.
