Western Digital Soars on AI Storage Demand, Price Target Raised to $650
WDC•Shares of Western Digital surged after Morgan Stanley raised its price target to $650 from $488, extending a 16% rally and a 7% one-day gain as AI data-center storage demand grows 40%-50% globally. The stock is up 250% year-to-date, though analysts warn it may face a near-term pullback.
1. AI Storage Demand Fuels All-Time Highs
Western Digital closed at all-time highs after investors piled into the stock on expectations that AI training workloads will drive 40%-50% global storage growth. The company’s HDD inventory has sold out as data-center operators expand capacity for large language model datasets.
2. Price Target Increase Spurs Rally
Morgan Stanley increased its price target to $650 from $488 and maintained an Overweight rating, prompting a 16% rally and a subsequent 7% one-day gain. Analysts cited the firm’s favorable gross margins and strong revenue trajectory as justification for the upgrade.
3. YTD Surge Raises Pullback Warnings
Shares are up 250% year-to-date, reflecting a hardware boom in AI-driven data centers, but some strategists warn that the rally may have decoupled from underlying fundamentals. Near-term pullback risks are elevated given stretched valuations and potential margin pressures.
