Western Digital (WDC) Stock Forecast & Price Target

Western Digital is benefiting from a structurally attractive HDD duopoly in which disciplined supply, no new unit capacity, and accelerating data-center demand support durable pricing power and higher margins. Management and the latest results show that nearline pricing rose 17% Y/Y, blended pricing reached $16.22/TB, gross margin hit 54.4%, and EPS of $3.56 beat expectations, while the modest exabyte shortfall was tied to product-transition timing rather than weakening fundamentals. With 40TB ePMR, UltraSMR, and 44TB HAMR on track to lift capacity and reaccelerate exabyte growth, the company’s sustained high-teens pricing, ~10% annual cost/TB declines, and strong free-cash-flow generation underpin the positive outlook.

Western Digital is facing a weaker fundamental setup as Nearline exabytes of 209EB fell short of the 219EB expected, while Consumer revenue of $187M also missed estimates, signaling softer demand in important end markets. Although Cloud revenue reached $3.33B and 80% of total revenue, the company’s outlook still appears vulnerable to a slowdown in hyperscale infrastructure spending, weaker AI-driven storage demand, and the risk that oversupply turns pricing gains only temporary. That pressure is reflected in reduced FY27E/FY28E revenue estimates to $18.95B/$27.60B and lower Non-GAAP EPS estimates to $20.17/$33.98, with added execution risk around HAMR ramp and potential market share loss.