Western Digital Surges 6.57% on Earnings Pop—Is This the Start of a New Bull Run?

Summary
• Western Digital (WDC) rockets 6.57% to $162.19, hitting its 52-week high of $163.93
• Q1FY26 revenue jumps 27% YoY to $2.82B, with a 25% dividend hike to $0.125/share
• Options frenzy: 701 contracts traded for the $160 call expiring Nov 14, with 115.5% price change potential

Western Digital’s stock is in a tailwind-driven frenzy after a blockbuster Q1FY26 report. The $2.82 billion revenue surge and dividend boost have ignited a 6.57% intraday rally, with the stock trading near its 52-week high. Analysts are scrambling to reassess the storage giant’s AI-driven growth narrative, while options traders bet big on continuation.

Earnings Pop and Dividend Hike Ignite Rally
Western Digital’s Q1FY26 results shattered expectations, with revenue surging 27% YoY to $2.82 billion and net income soaring to $1.18 billion. The 25% dividend increase to $0.125/share, coupled with a 20% YoY revenue guidance for Q2FY26, signaled management’s confidence in sustained demand for AI and cloud storage. The stock’s 6.57% intraday jump reflects investor optimism about the company’s ability to capitalize on AI-driven data creation and long-term customer commitments from hyperscalers.

Storage Sector Rides AI Tailwinds as Seagate Soars
The storage sector is in sync with Western Digital’s rally, led by Seagate Technology (STX) surging 10.41% intraday. Both firms benefit from AI’s insatiable demand for high-capacity drives. While Western Digital’s 6.57% gain is robust, Seagate’s sharper move highlights competitive dynamics in the cloud storage arms race. The sector’s collective momentum underscores the critical role of data infrastructure in AI’s next phase.

Options and ETFs to Capitalize on the AI Storage Boom
• 200-day average: 70.41 (well below current price)
• RSI: 72.54 (overbought territory)
• MACD: 10.095 (bullish divergence from signal line)
• Bollinger Bands: Price at 162.19, far above upper band of 153.92

Western Digital’s technicals scream continuation. The stock is trading at a 128.5% premium to its 200-day average, with RSI near overbought levels and MACD widening. Key support at 125.29 and resistance at 163.93 (52-week high) define the near-term range. Aggressive bulls should target the $160 call (WDC20251114C160) for a 115.5% projected payoff if the stock holds above 160. For downside protection, the $162.5 call (WDC20251114C162.5) offers 125.22% potential with a 21.41% leverage ratio.

Top Option 1: WDC20251114C160
• Strike: 160 | Expiration: Nov 14 | IV: 67.57% | Leverage: 18.85% | Delta: 0.58 | Theta: -0.6945 | Gamma: 0.0215 | Turnover: 603,213
• IV (high): Suggests strong volatility expectations
• Leverage (moderate): Balances risk/reward
• Delta (0.58): Sensitive to price moves
• Theta (-0.6945): Aggressive time decay
• Gamma (0.0215): Responsive to price swings
• Turnover (high): Ensures liquidity
• Payoff: At 5% upside (170.29), payoff = max(0, 170.29 - 160) = $10.29/share
• Why: High IV and gamma make this ideal for a short-term breakout.

Top Option 2: WDC20251114C162.5
• Strike: 162.5 | Expiration: Nov 14 | IV: 69.84% | Leverage: 21.41% | Delta: 0.527 | Theta: -0.6828 | Gamma: 0.0212 | Turnover: 72,808
• IV (high): Reflects elevated volatility
• Leverage (high): Amplifies gains
• Delta (0.527): Moderately sensitive
• Theta (-0.6828): Sharp time decay
• Gamma (0.0212): Responsive to price swings
• Turnover (high): Liquid contract
• Payoff: At 5% upside (170.29), payoff = max(0, 170.29 - 162.5) = $7.79/share
• Why: High leverage and IV make this a top pick for a continuation trade.

Action: If $160 holds, WDC20251114C160 offers explosive upside. For a safer play, WDC20251114C162.5 balances risk with reward.

Backtest Western Digital Stock Performance
Unfortunately, the Event Back-test Engine is currently returning a system-side error and is unable to finish the calculation. Here are two practical ways to move forward:1. Retry the analysis with the Strategy Back-test Engine • We would treat every “+7 % day” as a buy-signal (open) and add an automatic exit rule (e.g., sell after N trading days, or when a stop-loss / take-profit is hit). • This bypasses the malfunctioning event-specific engine while still letting us quantify the post-surge P&L, win-rate, drawdown, etc. • I can test several holding-periods (e.g., 3-day / 5-day / 10-day) so you can see which horizon works best.2. Pause until the Event Back-test Engine issue is resolved • If you prefer the dedicated event statistics (average return path, optimal holding period, event frequency, etc.), we can wait and rerun once the backend fix is in place.Please let me know which option you’d like to pursue—or if you have other preferences (e.g., a specific holding-period, additional filters, different stop/target settings). I’m ready to proceed as soon as I have your guidance.

Bullish Momentum Unlikely to Fade—Act Now
Western Digital’s rally is underpinned by structural AI demand and a robust earnings report. The stock’s 6.57% surge and proximity to its 52-week high suggest a continuation trade is warranted. Traders should prioritize the $160 call for aggressive exposure, while monitoring Seagate’s 10.41% surge as a sector barometer. With RSI near overbought levels and MACD widening, the next 72 hours will test the $163.93 ceiling. Act now: Buy WDC20251114C160 and watch for a breakout above 163.93.