What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 6.4% in the morning session after Morgan Stanley lifted its price target on the stock to $228 from $188.
The investment bank kept its "outperform" rating on the shares. This positive view followed a report from Mizuho, which maintained its own "Outperform" rating. Mizuho highlighted that Western Digital had strong visibility with its top five customers, who had purchase orders extending through the end of calendar 2026. One customer's orders even reached into calendar 2027, signaling long-term demand for the company's products.
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What Is The Market Telling Us
Western Digital’s shares are extremely volatile and have had 31 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 6.7% on the news that the Federal Reserve cut its key interest rate, boosting investor confidence across the market.
This dovish action, combined with highly accommodating signals from Chair Jerome Powell and the Federal Open Market Committee (FOMC), sent the Dow Jones Industrial Average and S&P 500 surging. The market's bullish reaction was rooted in several key takeaways from the Fed's announcement. Most significantly, the central bank confirmed it would begin expanding its balance sheet by buying short-term bonds, a move that injects critical liquidity and lowers short-term Treasury yields.
Furthermore, the Fed signaled a shift in priority by removing language that described the labor market as "remaining low," suggesting it would be more focused on supporting economic growth. While the Fed's official forecast projected only one cut for the next year, traders immediately priced in the expectation of more aggressive easing, banking on at least two rate reductions. This widespread anticipation of sustained, low borrowing costs and the virtual certainty that rate hikes would be off the table boosted corporate valuations and created powerful momentum for the equity market rally.
Western Digital is up 190% since the beginning of the year, and at $179.27 per share, it is trading close to its 52-week high of $187.20 from December 2025. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $3,370.
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