What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 4.5% in the morning session after Morgan Stanley raised its price target on the stock, citing robust demand for hard disk drives (HDDs).
The bank lifted its price target to $380 from $368 while keeping its Overweight rating. According to the firm's analysts, demand for HDDs continued to strengthen, driven by ongoing investment from large-scale data center operators. The analysis suggested that supply could remain tight through at least 2028, leading to potential shortages.
Furthermore, the price per terabyte of storage was found to be significantly stronger than previously expected. This improved backdrop for demand and pricing prompted Morgan Stanley to increase its estimates for the company's future profit margins and earnings per share.
After the initial pop the shares cooled down to $308.28, up 4.7% from previous close.
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What Is The Market Telling Us
Western Digital’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 11.3% on the news that an analyst at Bernstein upgraded the stock to Outperform from Market Perform, flagging a recent pullback as an attractive entry point.
The upgrade was also fueled by strong demand for AI-driven data center storage and better overall fundamentals. The analyst noted confidence in the company's fiscal 2026 outlook, with expectations for rising margins in its cloud and flash businesses. This positive view was supported by broader industry reports that projected significant growth in semiconductor equipment spending, driven by surging demand for AI chips in data centers and edge devices.
Western Digital is up 64.2% since the beginning of the year, and at $308.28 per share, it is trading close to its 52-week high of $316.93 from March 2026. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $4,233.
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