S&P 500 falls as traders turn sour on tech
Investing.com - TD Cowen raised its price target on Western Digital Corp. (NASDAQ:WDC) to $200 from $90 while maintaining a Buy rating on the stock, according to a research note released Friday. This new target exceeds even the highest analyst price target of $190 tracked by InvestingPro, as WDC shares have already surged 215.89% over the past six months, currently trading at $149.32.
The firm’s analysis suggests the hard disk drive (HDD) industry outlook remains favorable, with Western Digital reaffirming it is not adding manufacturing capacity. TD Cowen believes areal density improvements could drive over 20% exabyte growth in calendar year 2026 for both Western Digital and Seagate.
TD Cowen noted Western Digital’s recent results were "flawless" and sees continued upside potential for the stock as business visibility extends into 2027 within what it describes as a "rational duopoly industry." The company’s performance has been impressive, with revenue growth of 50.7% and a gross profit margin of 38.78% in the last twelve months.
The research firm highlighted that Western Digital’s cyclical peak gross margin could exceed 50%, compared to approximately 31% in the previous cycle (2021).
TD Cowen’s analysis indicates it may be "too early for HAMR" technology, referring to heat-assisted magnetic recording, but maintained it is "not too late to own the stock."
In other recent news, Western Digital Corporation reported its financial results for the first quarter of fiscal year 2026, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $1.78, exceeding the forecast of $1.58, and reported revenue of $2.82 billion, which was higher than the anticipated $2.73 billion. Despite these positive financial results, Western Digital’s stock experienced a decline of 2.3% in after-hours trading. Additionally, UBS raised its price target for Western Digital to $145, maintaining a Neutral rating, citing strong demand and improved margins due to pricing and supply discipline. Baird also increased its price target for the company significantly, from $97 to $180, while keeping an Outperform rating. Baird highlighted Western Digital’s strategy of relying on higher-density migrations rather than adding unit capacity to meet growth demand, aligning with industry trends. These developments reflect the company’s current positioning and strategic direction in the data storage market.
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