Key Takeaways:
- WDC stock jumped 10.6% to a record $788 on Intel-related speculation
- The rally extends a 1,115% surge over the past year on AI storage demand
- Analysts project EPS to more than double to $9.60 in fiscal 2026
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Western Digital surges 10.6% to record high on Intel speculation
Western Digital Corp. surged 10.6% to a record $788 on speculation of a strategic deal with Intel, extending a year-long rally fueled by AI infrastructure spending.
"Intel's storage assets could complement Western Digital's HDD portfolio and accelerate its enterprise roadmap," said Joseph Moore, semiconductor analyst at Morgan Stanley, which raised its WDC price target to $650 from $488 in a recent note.
The stock closed at $786.87 after touching an all-time high of $788. The move adds to a 1,115% gain over the past year as cloud providers and enterprises invest in large-scale data centers, driving demand for high-capacity nearline hard disk drives. Western Digital's fiscal fourth-quarter revenue is projected at about $3.65 billion, up 40% year-over-year, with gross margins expanding to 51% to 52% from 41.3% in the same period last year.
A deal with Intel would mark Western Digital's most significant strategic move since its 2016 acquisition of SanDisk. The company's earnings are expected to more than double to $9.60 per share in fiscal 2026 and climb another 83% to $17.61 in fiscal 2027, supported by pricing strength and tight supply conditions across the storage market.
The rally has drawn broad support from Wall Street. All 25 analysts covering WDC assign a "Strong Buy" rating, according to consensus data. The stock trades at 68 times forward earnings, a premium that analysts say is warranted given the earnings growth trajectory.
Western Digital continues to ramp advanced ePMR technology while preparing for broader deployment of heat-assisted magnetic recording drives and UltraSMR adoption. These higher-capacity products are expected to further boost margins and extend the company's competitive advantage in the enterprise storage market.
The rise of agentic AI — systems that generate and process larger amounts of data autonomously — could serve as an additional growth driver for storage providers. As enterprises deploy more AI-driven applications, data creation and storage demand are rising at record levels, positioning Western Digital's high-capacity nearline HDDs to capitalize on the trend.
This article is for informational purposes only and does not constitute investment advice.
