What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 0.9% in the afternoon session after the stock's positive momentum continued as several investment banks, including Morgan Stanley, Bank of America, and Rosenblatt Securities, raised their price targets on the stock.
The positive analyst sentiment was driven by a strengthening market for hard disk drives (HDDs). Analysts noted a surge in demand for data storage, fueled by increased cloud infrastructure spending and accelerating investments in AI technologies. Rosenblatt Securities pointed out that the "Age of AI runs on data" and that HDDs offered the lowest-cost solution for mass storage. Morgan Stanley named the data-storage company a “top pick,” and nearly doubled its price target to $171 from $99. Bank of America also lifted its price target to $141 from $123. The firms cited Western Digital's recent price increases across its products as another reason for the bullish outlook.
After the initial pop the shares cooled down to $118.08, up 1.1% from previous close.
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What Is The Market Telling Us
Western Digital’s shares are very volatile and have had 21 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 about 24 hours ago when the stock gained 7.6% on the news that several investment banks, including Morgan Stanley and Rosenblatt Securities, significantly raised their price targets on the stock, citing a strengthening market for hard disk drives (HDDs). Morgan Stanley hiked its price target to $171 from $99, while Rosenblatt increased its target to $125 from $90, with both firms maintaining a 'Buy' or 'Overweight' rating. Analysts attribute the optimism to a surge in demand for data storage, driven by increased cloud infrastructure spending and accelerating investments in AI technologies. Rosenblatt noted that the "Age of AI runs on data" and that HDDs provide the lowest-cost solution for mass storage, predicting that demand will outstrip supply through fiscal year 2027. This positive analyst sentiment comes as Western Digital benefits from a strong HDD cycle, which has been reflected in its recent price increases across its product portfolio.
Western Digital is up 90.8% since the beginning of the year, and at $118.08 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 $3,230.
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