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

Western Digital Corporation (NASDAQ:WDC)’s share price gapped down before the market opened on Tuesday . The stock had previously closed at $536.01, but opened at $496.07. Western Digital shares last traded at $504.1040, with a volume of 1,349,772 shares.

More Western Digital News

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

• Positive Sentiment: Broad memory-sector rally: Comments from Elon Musk about a potential memory bottleneck helped lift storage and memory stocks, including Western Digital, SanDisk and Micron. The comments reinforce expectations that AI infrastructure demand could outpace available supply. SanDisk, Western Digital and Micron rally on memory bottleneck concerns
• Positive Sentiment: Improving fundamentals: Western Digital’s expanding margins and forecast-beating outlook provided company-specific support for the stock, beyond the broader industry rally. Analysts are also raising earnings estimates, a trend that can attract additional buying. Western Digital stock jumps as memory rally accelerates Western Digital rising earnings estimates
• Positive Sentiment: AI and cloud demand outlook: Analysts cited strong storage end markets, better pricing and AI-driven cloud growth as catalysts for Western Digital’s HDD recovery entering fiscal 2027. Western Digital end markets and pricing tailwinds
• Positive Sentiment: High-profile bullish commentary: Jim Cramer said investors may still have an opportunity in memory and storage stocks, arguing that Western Digital and peers could continue benefiting from the sector’s strong momentum. Jim Cramer discusses memory and storage stocks
• Neutral Sentiment: Western Digital’s consumer WD 5TB My Passport drive was discounted by Amazon. The promotion may increase product visibility but is unlikely to materially affect the company’s overall investment case. Amazon discounts WD My Passport drive
• Negative Sentiment: Cycle-related risk: Commentators noted that memory chips have historically followed boom-and-bust cycles. If producers expand capacity too aggressively, a future supply glut could pressure pricing and margins even as near-term demand remains strong. Memory chip boom-and-bust cycle risks

Analyst Ratings Changes

WDC has been the topic of several research reports. JPMorgan Chase & Co. raised their price target on shares of Western Digital from $530.00 to $650.00 and gave the stock an “overweight” rating in a research note on Friday, June 12th. TD Cowen upped their price objective on shares of Western Digital from $500.00 to $540.00 and gave the company a “buy” rating in a research note on Thursday, August 6th. Robert W. Baird set a $630.00 price objective on shares of Western Digital in a report on Thursday, August 6th. Summit Insights downgraded shares of Western Digital from a “buy” rating to a “hold” rating in a report on Thursday, August 6th. Finally, Melius Research set a $1,050.00 target price on shares of Western Digital and gave the stock a “buy” rating in a research note on Monday, June 29th. Two equities research analysts have rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and five have assigned a Hold rating to the stock. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average target price of $534.56.

Western Digital Stock Performance

The business has a 50 day simple moving average of $556.51 and a 200-day simple moving average of $428.76. The firm has a market capitalization of $169.53 billion, a price-to-earnings ratio of 20.49 and a beta of 2.14.

Western Digital (NASDAQ:WDC) last announced 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 firm had revenue of $3.75 billion for the quarter, compared to analysts’ expectations of $3.70 billion. During the same quarter in the previous year, the company posted $1.66 EPS. The company’s 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. Equities analysts predict that Western Digital Corporation will post 19.65 earnings per share 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 $0.15 dividend. This represents a $0.60 annualized dividend and a yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital’s payout ratio is presently 2.48%.

Insider Activity

In related news, insider Vidyadhara K. Gubbi sold 2,475 shares of the company’s 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 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 transaction 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 company’s stock in a transaction that occurred on Thursday, May 28th. The shares were sold at an average price of $528.52, for a total value of $396,390.00. Following the completion of the transaction, the director owned 3,903 shares in the company, valued at $2,062,813.56. This represents a 16.12% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 25,093 shares of company stock worth $11,650,737. Corporate insiders own 0.18% of the company’s stock.

Institutional Investors Weigh In On Western Digital

Several hedge funds and other institutional investors have recently added to or reduced their stakes in WDC. Rakuten Securities Inc. lifted its stake in shares of 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 purchasing an additional 407 shares during the last quarter. Mowery & Schoenfeld Wealth Management LLC acquired a new stake in shares of Western Digital during the 2nd quarter worth about $28,000. Dunhill Financial LLC purchased a new stake in Western Digital in the 2nd quarter valued at about $29,000. Stonehage Fleming Financial Services Holdings Ltd purchased a new stake in Western Digital in the 2nd quarter valued at about $31,000. Finally, Valley Wealth Managers Inc. acquired a new position in Western Digital in the first quarter valued at about $32,000. Institutional investors and hedge funds own 92.51% of the company’s stock.

About Western Digital

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.