Western Digital Hit a Record High on Wall Street’s $650 Targets. Here’s Where the Stock Could Go

Key Stats for Western Digital Stock

• Current Price: $721.22
• Target Price (Mid): ~$1,135
• Street Target (Mean): ~$554
• Potential Total Return: ~74%
• Annualized IRR: ~15% / year
• Earnings Reaction: (0.69%) on April 30, 2026
• Max Drawdown: 20.59% on 3/30/26

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What Happened?

Western Digital Corporation (WDC) blew past its own consensus target and kept climbing. Shares jumped 16% on Monday, June 15, to an all-time high close of $653.53, then ran higher again on Tuesday to around $721. The mean analyst target sits near $554, so the stock now trades roughly 30% above where the average analyst values it.

That gap means one of two things. Either the move is exhausted, or the analysts are behind. Right now it is the second. Five banks raised targets in a single week, and the reason is not the AI demand story investors already know. It is a supply shortage that the Street is finally putting numbers on.

What Sparked the Move

The catalyst was a wave of target hikes led by Morgan Stanley:

• Morgan Stanley analyst Erik Woodring raised his target to $650 from $488, keeping Overweight and a $920 bull case.
• JPMorgan moved to $650 from $530 the prior Friday.
• Citi, Mizuho, and BofA lifted targets earlier in the month; China Renaissance went to $655.

What changed is the framing: earlier upgrades leaned on demand, this wave leaned on the shortage. Per Morgan Stanley’s note, the supply picture now looks like this:

• Hard disk drive (the spinning magnetic storage that holds about 80% of hyperscaler data) supply will fall 10% to 15% short of demand in 2026.
• Demand is growing roughly 40% to 50% a year on AI workloads; supply grows only 30% to 35%.
• Original design manufacturers, the contract builders that assemble servers for cloud customers, hold just one to two weeks of drive inventory.

The pricing read-through is what moves earnings. Western Digital and Seagate sell drives at roughly $14 to $15 per terabyte today, and Morgan Stanley notes both are targeting $25 to $30 per terabyte by 2027 and 2028. On that pricing, Morgan Stanley lifted its WDC earnings estimates to $22.40 next fiscal year and $43.47 in fiscal 2028, and said shares could double again if the bull case holds.

Western Digital EBITDA & Margins (TIKR)

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Why the CFO’s Comments Back This Up

The supply argument lines up with what CFO Kris Sennesael told investors at the Evercore Global TMT Conference on June 3. Asked how WDC meets demand above 25% without new factories, he was blunt: “We don’t have to add unit capacity to support that. We can support this very strong growth of greater than 25% through technology and product transitions, as we move to higher capacity drives.”

That answer is the margin story the Street is paying for:

• Average selling price per terabyte rose 9% year over year, while cost per terabyte fell roughly 10% a year, because a 40-terabyte drive costs little more to build than a 32-terabyte one.
• That spread drives incremental gross margins of 70% to 75%.
• Gross margin crossed 50% for the first time in the March quarter.

Western Digital reported fiscal Q3 2026 on April 30, with revenue of $3,337 million ahead of the $3,248 million consensus per TIKR and adjusted EPS of $2.72 against a $2.39 estimate. The stock fell just 0.69% that day, not on a weak print, but because it had already run hard into the date.

How WDC Stacks Up Against Seagate

On the TIKR Competitors page, Western Digital trades at 13.61x NTM EV/Revenues and 28.26x NTM EV/EBITDA. Seagate (STX) is richer at 15.16x and 32.44x on the same two multiples. Both ride the same shortage, yet Western Digital carries a two-year forward revenue CAGR of around 37% per TIKR and still prices below its closest peer. That discount is hard to justify on growth alone, and likely reflects lingering doubt over whether margin gains this steep can last.

Western Digital Street Targets (TIKR)

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• Current Price: $721.22
• Target Price (Mid): ~$1,135
• Potential Total Return: ~74%
• Annualized IRR: ~15% / year

Western Digital Advanced Valuation Model (TIKR)

See analysts’ growth forecasts and price targets for Western Digital stock (It’s free!) >>>

The mid-case target runs on two revenue drivers: hyperscaler exabyte demand growing above 25% a year, and the shift to higher-capacity drives that lift selling prices. The margin driver is the cost-per-terabyte curve Sennesael described, with the model carrying a net income margin near 40%.

The upside: if the supply gap holds and pricing reaches the $25 to $30 range, earnings compound faster than the multiple and the stock grows into a four-figure price. The downside: a hyperscaler capital spending slowdown would hit pricing and margins at once, and the long-term agreements only buffer that through about 2028.

Conclusion

The number that settles this debate is the price per terabyte. Today, it is roughly $14 to $15; the bulls are betting on $25 to $30 by 2027 and 2028. When WDC reports fiscal Q4 in early August, watch the average selling price per terabyte and the gross margin trend. A sequential ASP gain with a margin holding above 50% confirms the shortage is real. A flat ASP or any margin slip says the pricing thesis ran ahead of the business, and a stock 30% above consensus has room to fall. August tells you which.

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Should You Invest in Western Digital?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Western Digital, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Western Digital alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!