Western Digital (NASDAQ:WDC) Shares Down 10.2% – Here’s Why

Western Digital Corporation (NASDAQ:WDC) shares dropped 10.2% on Friday. The stock traded as low as $396.57 and last traded at $415.29. 24,620,675 shares were traded during trading, an increase of 186% from the average daily volume of 8,606,969 shares. The stock had previously closed at $462.56.

More Western Digital News

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

• Positive Sentiment: Analysts described the selloff as potentially excessive because demand for high-capacity HDDs remains strong, particularly from cloud providers and AI data centers. Western Digital recently reported fiscal fourth-quarter revenue growth of approximately 44% year over year, exceeded earnings expectations, and issued fiscal first-quarter 2027 EPS guidance of $3.85 to $4.15. STX, WDC Stocks Sink On Toshiba’s Reported Plan To Double AI Hard-Disk Capacity
• Positive Sentiment: Western Digital’s longer-term investment case remains supported by AI-driven storage demand, and some analysts believe the company’s strong operating momentum and industry growth could limit the impact of Toshiba’s expansion. Recent analyst price targets have generally remained well above the current trading level. Seagate vs. Western Digital: One Stock Is a Buy After Today’s Drop
• Neutral Sentiment: The broader market opened relatively strongly after a weaker-than-expected jobs report pushed Treasury yields lower, indicating that WDC’s decline was primarily company- and industry-specific rather than the result of broad market weakness. Tech Stocks Jump After Jobs Report Miss
• Negative Sentiment: Toshiba reportedly plans to invest about 60 billion yen, or roughly $380 million, to double HDD production in the Philippines by fiscal 2027. It is targeting approximately 30% of HDD capacity, up from just over 10%, potentially easing the supply shortage that has supported Western Digital’s pricing and valuation. Seagate, Western Digital Fall as Toshiba Plans AI Storage Expansion
• Negative Sentiment: Investors are reassessing whether tight HDD supply will remain a durable tailwind. A more aggressive Toshiba could intensify competition for cloud and AI data-center customers, creating risks for Western Digital’s future market share, revenue growth, margins, and pricing power. Seagate, Western Digital Shares Sink on Toshiba Production Report

Analysts Set New Price Targets

Several equities analysts recently commented on WDC shares. Wall Street Zen cut shares of Western Digital from a “strong-buy” rating to a “buy” rating in a research note on Sunday, August 16th. Bank of America increased their target price on shares of Western Digital from $610.00 to $732.00 and gave the stock a “buy” rating in a research note on Wednesday, July 1st. Cantor Fitzgerald raised their price target on shares of Western Digital from $660.00 to $900.00 and gave the company an “overweight” rating in a report on Monday, June 29th. Citigroup reduced their price target on shares of Western Digital from $800.00 to $740.00 and set a “buy” rating for the company in a research report on Friday, August 7th. Finally, Melius Research set a $1,050.00 price objective on Western Digital and gave the stock a “buy” rating in a research report on Monday, June 29th. Two equities research analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and five have issued a Hold rating to the company. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $534.56.

Western Digital Stock Down 10.2%

The company has a market capitalization of $143.14 billion, a PE ratio of 17.15, a price-to-earnings-growth ratio of 1.93 and a beta of 2.11. The firm’s 50-day moving average is $467.20 and its 200-day moving average is $470.83.

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 analysts’ consensus estimates of $3.31 by $0.25. The business had revenue of $3.75 billion for the quarter, compared to the consensus estimate of $3.70 billion. Western Digital had a return on equity of 48.15% and a net margin of 72.95%.The company’s revenue for the quarter was up 43.8% on a year-over-year basis. During the same quarter last year, the business posted $1.66 earnings per share. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. As a group, equities research analysts predict that Western Digital Corporation will post 19.65 EPS for the current year.

Western Digital Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Thursday, September 17th. Shareholders of record on Tuesday, September 8th were paid a dividend of $0.15 per share. The ex-dividend date of this dividend was Tuesday, September 8th. This represents a $0.60 annualized dividend and a dividend yield of 0.1%. Western Digital’s dividend payout ratio (DPR) is 2.48%.

Insider Transactions at Western Digital

In related news, insider Vidyadhara K. Gubbi sold 1,795 shares of the stock in a transaction on Friday, September 4th. The shares were sold at an average price of $459.87, for a total transaction of $825,466.65. Following the transaction, the insider owned 80,571 shares of the company’s stock, valued at approximately $37,052,185.77. This trade represents a 2.18% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Cynthia L. Tregillis sold 432 shares of Western Digital stock in a transaction on Friday, September 4th. The stock was sold at an average price of $451.20, for a total transaction of $194,918.40. Following the completion of the transaction, the insider owned 111,030 shares in the company, valued at approximately $50,096,736. The trade was a 0.39% 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. In the last ninety days, insiders sold 25,437 shares of company stock worth $11,461,345. 0.18% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the company. Legal & General Group Plc purchased a new stake in Western Digital during the 2nd quarter valued at $1,602,927,000. ABS Investment Management LLC purchased a new position in shares of Western Digital in the second quarter valued at about $1,226,342,000. Anther Capital Ltd purchased a new stake in shares of Western Digital during the second quarter worth about $901,601,000. Deutsche Bank AG bought a new stake in shares of Western Digital in the second quarter worth about $885,565,000. Finally, Trivest Advisors Ltd bought a new stake in shares of Western Digital in the second quarter worth about $627,606,000. 92.51% of the stock is owned by hedge funds and other institutional investors.

Western Digital Company Profile

Western Digital Corporation (NASDAQ: WDC) develops, manufactures and supplies data-storage products and solutions. The company’s portfolio is centered on hard disk drives (HDDs) used in cloud and enterprise data centers, personal computers, network-attached storage systems and other applications that require high-capacity data storage.

Western Digital markets products under brands including Western Digital, WD and Ultrastar. Its offerings include enterprise and data-center HDDs, storage products for business and consumer systems, and related technologies designed to help organizations store, manage and access large volumes of data.

Founded in 1970, Western Digital has evolved from a maker of electronic components into a global data-storage company.