Western Digital (WDC) Shares Climb 0.68% on AI Demand Surge, Analyst Upgrades

Western Digital (WDC) shares rose 0.68% on Monday, extending their winning streak to 11 consecutive days with a cumulative gain of 28.32%. The stock hit its highest level since September 2025, with an intraday surge of 1.55%, reflecting renewed investor confidence in the company’s strategic positioning amid evolving market dynamics.

The recent price increase for Western Digital’s hard disk drives (HDDs), driven by “unprecedented demand” for high-capacity storage, has positioned the company as a key player in the AI infrastructure boom. Analysts highlighted that tech giants like Google and Oracle are accelerating investments in large-scale data storage to support generative AI initiatives, pushing lead times for high-capacity HDDs to nearly a year. This supply-demand imbalance has reinforced the company’s pricing power, with industry sources noting additional delays of six to ten weeks due to sea freight dependencies.

Positive sentiment was further amplified by analyst upgrades. Benchmark raised its price target to $115 from $85, maintaining a “Buy” rating, while Exane and BNP Paribas elevated their assessments. Morgan Stanley’s reaffirmation of an “Overweight” rating, following executive meetings, underscored confidence in Western Digital’s technology roadmap. These moves, coupled with increased trading activity in WDC call options, signaled speculative optimism about sustained price appreciation.

Strategic product launches, including 22TB and 44TB Sandisk Professional drives and compact M.2-2230 SSDs, have diversified Western Digital’s revenue streams. The company’s leadership in high-capacity HDDs aligns with the inelastic demand for AI storage, as noted in industry analyses. Meanwhile, refinancing of Kioxia’s $13.5 billion loan for the Western Digital merger has stabilized the company’s balance sheet, enabling it to consolidate its NAND flash memory market position while expanding HDD capabilities.

Despite challenges like supply chain bottlenecks and competition from Seagate, Western Digital’s stock has surged 66% year-to-date, reaching a 52-week high of $102.71. The company’s recent decision to sell its Milpitas campus for $193 million reflects disciplined capital allocation, addressing short-term liquidity needs without compromising long-term growth. Investors are advised to monitor the company’s ability to maintain pricing discipline and execute its technology roadmap as key performance indicators.