Western Digital (NASDAQ:WDC) Shares Gap Down on Analyst Downgrade

Shares of Western Digital Corporation (NASDAQ:WDC) gapped down prior to trading on Thursday after Summit Insights downgraded the stock from a buy rating to a hold rating. The stock had previously closed at $519.17, but opened at $428.89. Western Digital shares last traded at $459.5550, with a volume of 4,912,740 shares trading hands.

WDC has been the subject of a number of other reports. Wells Fargo & Company upped their price target on Western Digital from $575.00 to $730.00 and gave the company an “overweight” rating in a research report on Friday, July 10th. Wall Street Zen upgraded Western Digital from a “hold” rating to a “buy” rating in a research report on Saturday, May 2nd. Cantor Fitzgerald boosted their price objective on Western Digital from $660.00 to $900.00 and gave the stock an “overweight” rating in a research note on Monday, June 29th. Barclays upped their target price on Western Digital from $450.00 to $620.00 and gave the company an “overweight” rating in a report on Wednesday, May 27th. Finally, Susquehanna raised their target price on Western Digital from $360.00 to $500.00 and gave the stock a “neutral” rating in a research note on Wednesday, July 8th. Two analysts have rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and five have given a Hold rating to the company. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $527.12.

Insider Transactions at Western Digital

In related news, insider Vidyadhara K. Gubbi sold 2,475 shares of the stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $556.24, for a total value of $1,376,694.00. Following the completion of the transaction, the insider directly owned 85,154 shares in the company, valued at approximately $47,366,060.96. This represents a 2.82% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, Director Bruce E. Kiddoo sold 750 shares of the firm’s stock in a transaction on Thursday, May 28th. The stock was sold at an average price of $528.52, for a total value of $396,390.00. Following the sale, the director directly owned 3,903 shares of the company’s stock, valued at approximately $2,062,813.56. This trade represents a 16.12% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 5,093 shares of company stock worth $2,751,337 in the last 90 days. Insiders own 0.18% of the company’s stock.

Key Headlines Impacting Western Digital

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

• Positive Sentiment: Western Digital reported adjusted earnings of $3.56 per share on $3.75 billion in revenue, beating consensus estimates of $3.31 and $3.70 billion, respectively. Revenue increased 43.8% year over year, while profit rose sharply from $1.66 per share a year earlier. Western Digital Q4 earnings report
• Positive Sentiment: Management’s fiscal first-quarter 2027 outlook was above analyst expectations, calling for EPS of $3.85-$4.15 and revenue of $4.0-$4.2 billion versus consensus estimates of $3.63 and $3.9 billion. The company also said AI customers are negotiating storage capacity commitments as far out as 2031, supporting long-term demand visibility. Western Digital AI storage demand
• Neutral Sentiment: Analyst opinion became mixed. Rosenblatt retained a Buy rating while reducing its price target to $800 from $900, and Baird raised its target to $630 with a Buy rating. In contrast, Summit Insights downgraded the shares from Buy to Hold, reflecting concerns about the stock’s already elevated expectations.
• Negative Sentiment: The stock fell sharply because the earnings beat and outlook did not clear the very high bar set by its roughly threefold recent advance and the broader AI-storage trade. Investors appear concerned about the pace of future growth and margins, with some reports noting that rival Seagate delivered an even stronger quarter. Storage peers, including SanDisk, also declined, reinforcing a broader technology-sector rotation. Reuters report on Western Digital and SanDisk

Institutional Trading of Western Digital

A number of hedge funds and other institutional investors have recently modified their holdings of WDC. Rakuten Securities Inc. raised its holdings in Western Digital by 4,070.0% in the 2nd quarter. Rakuten Securities Inc. now owns 417 shares of the data storage provider’s stock valued at $27,000 after buying an additional 407 shares during the period. Avion Wealth boosted its stake in Western Digital by 163.8% during the fourth quarter. Avion Wealth now owns 182 shares of the data storage provider’s stock worth $31,000 after buying an additional 113 shares during the period. Valley Wealth Managers Inc. purchased a new position in Western Digital during the first quarter worth about $32,000. Swiss RE Ltd. acquired a new stake in shares of Western Digital during the fourth quarter valued at about $32,000. Finally, BOKF NA raised its stake in shares of Western Digital by 6,700.0% in the 3rd quarter. BOKF NA now owns 272 shares of the data storage provider’s stock valued at $33,000 after acquiring an additional 268 shares during the period. 92.51% of the stock is owned by institutional investors and hedge funds.

Western Digital Stock Performance

The business’s 50 day moving average price is $569.14 and its 200-day moving average price is $415.61. The firm has a market capitalization of $156.60 billion, a PE ratio of 27.39 and a beta of 2.14.

Western Digital (NASDAQ:WDC) last posted its quarterly earnings data on Tuesday, August 4th. The data storage provider reported $3.56 earnings per share for the quarter, topping analysts’ consensus estimates of $3.31 by $0.25. The firm had revenue of $3.75 billion during the quarter, compared to analysts’ expectations of $3.70 billion. Western Digital had a net margin of 55.29% and a return on equity of 42.95%. The firm’s quarterly revenue was up 43.8% on a year-over-year basis. During the same quarter last year, the company posted $1.66 EPS. As a group, analysts anticipate that Western Digital Corporation will post 9.61 earnings per share for the current year.

Western Digital Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th will be given a dividend of $0.15 per share. This represents a $0.60 annualized dividend and a dividend yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital’s dividend payout ratio (DPR) is currently 3.58%.

Western Digital Company Profile

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.