What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 9.9% in the afternoon session after the company posted strong fourth-quarter fiscal 2025 results that beat Wall Street estimates. The company's revenue jumped 30% year-over-year to $2.61 billion, while its earnings per share reached $1.66. This performance stemmed from strong demand for high-capacity storage, especially in its Cloud segment, which saw revenues climb 36%. The growth reflected surging needs from cloud computing and generative AI applications. Adding to the positive news, the company introduced a new quarterly dividend and announced a $2 billion share repurchase program. Consequently, several Wall Street analysts raised their price targets on the stock.
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What Is The Market Telling Us
Western Digital’s shares are very volatile and have had 20 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 8 days ago when the stock gained 3.5% on the news that a new trade agreement between the United States and Japan spurred a broad market rally. The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.
Western Digital is up 26.8% since the beginning of the year, and at $78.47 per share, has set a new 52-week high. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $1,821.
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