WDC Surges 5.22% on Strong AI Storage Momentum and $1.21B Turnover Ranking 61st as Analysts Debate Profitability Challenges

Western Digital (WDC) surged 5.22% on September 4, 2025, with a trading volume of $1.21 billion, securing the 61st highest turnover in the market. The stock’s performance reflects strong momentum driven by improving financial metrics and strategic positioning in the AI-driven storage sector.

Analysts highlighted WDC’s recent quarterly results, including a 30% year-over-year revenue increase to $2.6 billion and a notable improvement in gross margins to 41.0%, up from 34.8% in the same period last year. The company also reduced debt by $2.6 billion and initiated a cash dividend. Zacks Investment Research upgraded the stock to a “Strong Buy” (Rank #1), citing its leadership in scalable storage solutions for hyperscalers and cloud providers. CEO Irving Tan emphasized the enduring relevance of HDDs in AI infrastructure, reinforcing optimism about long-term demand.

However, some analysts raised concerns about WDC’s historical performance. Over the past five years, the company’s revenue declined at a 10.7% annual rate, and its gross margin averaged a negative 7.7% over two years, indicating structural profitability challenges. Additionally, its five-year average ROIC of 4.7% lags behind typical capital costs in the semiconductor industry, suggesting inefficient capital allocation. Despite these fundamentals, the stock’s recent rally has pushed it to a 52-week high, raising questions about valuation sustainability.

Backtest data shows WDC closed at a 5.22% gain on September 4, 2025, with a volume of $1.21 billion. The stock’s price movement aligns with a “Golden Cross” technical signal, where the 50-day moving average surpassed the 200-day line, historically indicating bullish momentum.