Western Digital Surges 4.4% on Nasdaq 100 Inclusion: Is This the Start of a New Bull Run?

Summary
• Western Digital (WDC) surges 4.4% to $182.71, hitting a 52-week high of $183.58
• Nasdaq 100 index inclusion on Dec. 22 drives institutional demand and liquidity boost
• Q1 FY2026 revenue jumps 27% YoY to $2.82B, with 89% of revenue from cloud infrastructure
• Analysts project 57.4% EPS growth for FY2026, with Loop Capital raising price target to $250

Western Digital’s 4.4% intraday rally has ignited investor fervor ahead of its Nasdaq 100 inclusion, a catalyst expected to amplify institutional buying through index-tracking funds. The stock’s surge reflects robust demand for data storage in AI-driven cloud infrastructure, with Q1 results showing 27% revenue growth and a 30.4% operating margin. Analysts are bullish, with Loop Capital’s $250 price target signaling 42.85% upside potential.

Nasdaq 100 Inclusion Fuels Liquidity Surge
Western Digital’s 4.4% rally is directly tied to its upcoming addition to the Nasdaq 100 Index on Dec. 22. This inclusion will trigger mandatory purchases by index-tracking funds like Invesco QQQ Trust (QQQ), which manages over $200B in assets. The move ensures immediate liquidity inflows as over 200 index-linked products rebalance portfolios. Additionally, the stock’s 267% 52-week gain—driven by AI and cloud storage demand—has positioned it as a high-conviction play for investors seeking exposure to the data storage boom.

Storage Sector Rally: Seagate (STX) Leads the Charge
The Technology Hardware, Storage & Peripherals sector is surging, with Seagate Technology (STX) up 2.78% intraday. As a direct peer, STX’s performance underscores the sector’s strength amid AI-driven demand for high-capacity drives. Western Digital’s inclusion in the Nasdaq 100 is likely to amplify sector-wide momentum, as institutional investors rotate into storage stocks with durable pricing power. Both companies benefit from a supply-constrained HDD market, with BofA analysts noting HDD demand will outstrip supply through 2027.

Options Playbook: Leveraging Volatility and Gamma for Aggressive Bulls
• 200-day average: $86.16 (well below current price)
• RSI: 57.79 (neutral, not overbought)
• MACD: 7.02 (bullish divergence from signal line 7.46)
• Bollinger Bands: Price at 182.71, 18.89% above middle band (164.43)

Western Digital’s technicals suggest a continuation of its 52-week rally, with key support at the 200-day MA ($86.16) and resistance at the 52-week high ($188.77). The stock’s 4.4% move into the Nasdaq 100 has elevated volatility, making leveraged options attractive for aggressive positioning. Two top options stand out:

• WDC20251226C180
- Type: Call
- Strike: $180
- Expiration: 2025-12-26
- IV: 49.60% (moderate)
- Leverage Ratio: 26.49% (high)
- Delta: 0.601 (moderate sensitivity)
- Theta: -0.828 (rapid time decay)
- Gamma: 0.0288 (high sensitivity to price moves)
- Turnover: 213,503 (liquid)
- Payoff at 5% upside (191.85): $11.85/share
- Why it stands out: High leverage and gamma make this call ideal for a short-term rally, with theta decay favoring quick execution before expiration.

• WDC20251226C185
- Type: Call
- Strike: $185
- Expiration: 2025-12-26
- IV: 48.28% (moderate)
- Leverage Ratio: 42.80% (very high)
- Delta: 0.451 (moderate sensitivity)
- Theta: -0.707 (rapid decay)
- Gamma: 0.0303 (high sensitivity)
- Turnover: 270,426 (liquid)
- Payoff at 5% upside (191.85): $6.85/share
- Why it stands out: The highest leverage ratio (42.80%) amplifies returns for a modest price move, with gamma ensuring responsiveness to volatility spikes.

Aggressive bulls should prioritize WDC20251226C180 for its balance of leverage and liquidity, while WDC20251226C185 offers explosive upside if the stock breaks above $185. Both contracts benefit from the Nasdaq 100 inclusion-driven momentum.

Backtest Western Digital Stock Performance
The backtest of Western Digital Corporation (WDC) after an intraday surge of at least 4% from 2022 to the present shows favorable short-to-medium-term performance. The 3-day win rate is 56.25%, the 10-day win rate is 61.72%, and the 30-day win rate is 70.31%, indicating a higher probability of positive returns in the immediate aftermath of the surge. The maximum return during the backtest period was 13.23%, which occurred on day 59 after the surge, suggesting that while there is potential for gains, the stock may experience volatility in the days following the initial surge.

Nasdaq 100 Inclusion: A Catalyst for Sustained Bullish Momentum
Western Digital’s Nasdaq 100 inclusion is a structural tailwind that will drive institutional buying and liquidity, reinforcing its 52-week rally. With 89% of revenue now from cloud infrastructure and AI-driven demand accelerating, the stock is well-positioned to outperform sector peers. Investors should monitor the 200-day MA ($86.16) as a critical support level and watch Seagate (STX, +2.78%) for sector-wide validation. Aggressive bulls should target WDC20251226C180 for a short-term play, while long-term holders can capitalize on the 42.85% upside potential highlighted by Loop Capital’s $250 price target.