Western Digital (NASDAQ:WDC) Trading Down 3.5% – Here’s What Happened

Western Digital Corporation (NASDAQ:WDC)’s stock price fell 3.5% on Tuesday . The stock traded as low as $407.12 and last traded at $411.96. Approximately 7,555,081 shares traded hands during mid-day trading, a decline of 12% from the average daily volume of 8,597,655 shares. The stock had previously closed at $426.94.

Key Headlines Impacting Western Digital

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital continues to benefit from strong fundamentals. Its latest quarterly results exceeded earnings and revenue estimates, with revenue rising 43.8% year over year, and management issued quarterly EPS guidance of $3.85–$4.15. The stock had also gained substantially over the prior six months, reflecting optimism about storage demand. Western Digital Buy Sell or Hold Post Q2 Earnings
• Positive Sentiment: Western Digital is emphasizing its role in AI data storage and plans to highlight its technology at the AI Infrastructure Summit. Growing data volumes from AI workloads remain a potential multiyear demand driver for hard drives and storage systems. Western Digital AI Infrastructure Summit
• Neutral Sentiment: Fidelity’s Dividend Growth Fund identified Western Digital as a top relative contributor in its second-quarter portfolio update, offering institutional support but not representing a new company-specific catalyst. Western Digital Fund Contributor
• Negative Sentiment: Western Digital announced the redemption of all $109.5 million outstanding principal of its 3% convertible notes due 2028. Although the redemption reduces future debt, investors are focused on the possibility of conversion-related dilution and the use of cash, contributing to selling pressure. Why Western Digital Stock Is Trading Lower
• Negative Sentiment: Broader weakness in AI memory and storage stocks is weighing on WDC, with investors taking profits after its strong run. Comparisons with Seagate also raise concerns that Western Digital may be slower to deploy next-generation drives and secure hyperscale AI contracts. Seagate Versus Western Digital AI Storage Demand

Analyst Upgrades and Downgrades

WDC has been the subject of a number of recent analyst reports. Melius Research set a $1,050.00 price target on Western Digital and gave the company a “buy” rating in a research note on Monday, June 29th. Jefferies Financial Group set a $575.00 price objective on shares of Western Digital in a research note on Tuesday, May 26th. Morgan Stanley reaffirmed an “overweight” rating and issued a $676.00 target price on shares of Western Digital in a research note on Thursday, August 6th. JPMorgan Chase & Co. increased their target price on shares of Western Digital from $530.00 to $650.00 and gave the stock an “overweight” rating in a report on Friday, June 12th. Finally, Wall Street Zen cut shares of Western Digital from a “strong-buy” rating to a “buy” rating in a research report on Sunday, August 16th. Two investment analysts have rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and six have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $534.56.

Western Digital Trading Down 3.5%

The firm has a market capitalization of $142.00 billion, a P/E ratio of 17.02, a PEG ratio of 1.90 and a beta of 2.13. The business has a 50 day moving average of $490.38 and a 200-day moving average of $454.34.

Western Digital (NASDAQ:WDC) last released its quarterly earnings results on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share for the quarter, beating the consensus estimate of $3.31 by $0.25. Western Digital had a net margin of 72.95% and a return on equity of 48.15%. The company had revenue of $3.75 billion during the quarter, compared to analysts’ expectations of $3.70 billion. During the same quarter in the prior year, the company earned $1.66 earnings per share. The business’s quarterly revenue was up 43.8% compared to the same quarter last year. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. On average, analysts anticipate that Western Digital Corporation will post 19.65 EPS for the current fiscal year.

Western Digital Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 17th. Shareholders of record on Tuesday, September 8th will be issued a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital’s dividend payout ratio is 2.48%.

Insider Buying and Selling at Western Digital

In other Western Digital news, insider Vidyadhara K. Gubbi sold 1,795 shares of the business’s stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $459.87, for a total value of $825,466.65. Following the sale, the insider owned 80,571 shares in the company, valued at approximately $37,052,185.77. The trade was a 2.18% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CEO Irving Tan sold 20,000 shares of the stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total transaction of $8,899,400.00. Following the transaction, the chief executive officer owned 575,966 shares of the company’s stock, valued at $256,287,591.02. The trade was a 3.36% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 25,437 shares of company stock valued at $11,461,345 in the last 90 days. 0.18% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Western Digital

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the business. ABS Direct Equity Fund LLC raised its holdings in Western Digital by 112.8% during the second quarter. ABS Direct Equity Fund LLC now owns 1,277 shares of the data storage provider’s stock worth $816,000 after acquiring an additional 677 shares in the last quarter. Sequoia Financial Advisors LLC grew its stake in Western Digital by 3.5% in the second quarter. Sequoia Financial Advisors LLC now owns 17,263 shares of the data storage provider’s stock valued at $11,026,000 after purchasing an additional 579 shares in the last quarter. MCF Advisors LLC grew its stake in Western Digital by 480.4% in the second quarter. MCF Advisors LLC now owns 296 shares of the data storage provider’s stock valued at $189,000 after purchasing an additional 245 shares in the last quarter. Archford Capital Strategies LLC acquired a new position in shares of Western Digital during the 2nd quarter worth approximately $384,000. Finally, WINTON GROUP Ltd increased its position in shares of Western Digital by 1.3% during the 2nd quarter. WINTON GROUP Ltd now owns 24,252 shares of the data storage provider’s stock worth $15,490,000 after purchasing an additional 315 shares during the last quarter. 92.51% of the stock is currently owned by institutional investors and hedge funds.

About Western Digital

Western Digital Corporation (NASDAQ: WDC) develops, manufactures and sells data storage products and solutions for data centers, cloud service providers, enterprises, businesses and consumers. Its portfolio is centered on hard disk drives (HDDs), including high-capacity enterprise drives used in cloud and data center environments, as well as products for network-attached storage, surveillance and personal computing.

The company markets products under brands including Western Digital, WD, WD_BLACK and Ultrastar.