Data storage provider Western Digital Corporation (WDC) recently received a price target hike from analysts at Mizuho from $470 to $550, as agentic AI-related tailwinds are expected to create some prospects for the company. Agentic AI has moved beyond being just a concept and is posing a transformational change in the tech landscape. These AI agents make goal-based decisions and can act independently in different situations. 

Given the demand for this technology, Mizuho analysts expect dynamic random-access memory (DRAM) contract prices to rise 35% quarter-over-quarter in the second quarter of 2026, a huge jump from the previously expected 16% growth. 

As agentic AI requires massive volumes of high-speed, low-latency data to train and operate, Western Digital faces a significant demand for its high-performance storage solutions from this market. Against this backdrop, investors might consider looking into Western Digital stock now.

About Western Digital Stock

Western Digital Corporation, headquartered in San Jose, California, develops, manufactures, and provides data storage solutions based on hard disk drive (HDD) technology. The company is focused on using its HDD capabilities to bolster the cloud and hyperscale data center markets. 

Its main products include internal and external HDDs, portable HDDs, data center storage, NAS for home and office, and related accessories. Operating through the major brands Western Digital and WD, it sells its devices through computer manufacturers, dealers, distributors, and retailers. 

Previously, the company was also engaged in the direct production and sale of solid-state drives (SSDs) before exiting the market. Western Digital has a partnership with Open Quantum Design to develop quantum error correction technology and related systems. Currently, it has a market capitalization of $166.5 billion. 

As the company transitioned from a cyclical storage player to an AI-focused leader after exiting its flash memory business, HDD demand from AI data centers and hyperscale infrastructure providers led to a sharp rise in the stock. 

Over the past 52 weeks, the stock has gained 921.85%, while it has been up 162.77% year-to-date (YTD). Just for comparison, the broader S&P 500 Index ($SPX) has increased 30.15% over the past 52 weeks and 7.06% YTD. WDC’s shares reached a 52-week high of $483.87 on May 6, and are only off 4.5% from that level. 

On a forward-adjusted basis, Western Digital’s stock has traded at a price-to-earnings (non-GAAP) ratio of 48.70 times, above the industry average of 24.07 times. 

Western Digital Posts Strong Q3 FY26 Performance, Driven by Robust Demand 

On April 30, Western Digital reported its third-quarter results for fiscal 2026 (quarter ended Apr. 3), which clearly indicated the company’s strong demand drivers. The company’s revenue increased 45% year-over-year (YOY) to $3.34 billion, which was higher than the $3.24 billion that Wall Street analysts had expected. Western Digital pointed out strong demand drivers, such as AI workload, from agentic AI to physical AI, that create a huge data load to be stored in HDDs. 

Its non-GAAP gross margin is inflated by 1,040 basis points YOY to 50.5%, while its non-GAAP operating margin grew from 26% to 38.6% over the same period. Western Digital’s non-GAAP EPS grew 97% from the prior-year period to $2.72, which was also higher than the $2.41 that analysts had expected. 

Wall Street analysts also expect Western Digital’s bottom line to grow robustly. For the current fiscal year, profit is expected to increase by 111.3% annually to $9.57 per diluted share, followed by a 74.6% growth to $16.71 in the next fiscal year. 

What Do Analysts Think About Western Digital Stock?

Post Western Digital’s quarterly earnings, analysts have mostly reiterated their positive stances on the stock. Baird analyst Tristan Gerra maintained an “Outperform” rating and raised the price target to $450 from $310. Analysts from Barclays also raised the price target from $405 to $450, while keeping an “Overweight” rating. 

Cantor Fitzgerald analysts maintained an “Overweight” rating, while raising the price target from $500 to a Street-high of $660. Analysts at the firm cited the recent quarterly results, noting that the company is experiencing better pricing and strong demand from data centers. Analysts at Citi also maintained a “Buy” rating and raised the price target from $405 to $500, citing a beat-and-raise quarter and improving visibility into AI-driven HDD demand. 

Western Digital is gaining praise on Wall Street, with analysts awarding it a consensus “Strong Buy” rating overall. Of the 25 analysts rating the stock, a majority of 20 analysts have given it a “Strong Buy,” one a “Moderate Buy,” and four a “Hold.” The consensus price target of $485.68 represents a 4.7% upside from current levels. Moreover, the Street-high price target of $660 implies a 42.3% upside from here.