Western Digital (WDC) Surges 15.1%: Is This an Indication of Further Gains?

Company Performance - Western Digital (WDC) shares increased by 15.1% to $36.30, following a 24.5% loss over the previous four weeks, driven by President Trump's announcement of a 90-day halt on reciprocal tariffs, excluding China [1] - The company is experiencing increasing sales momentum in the Cloud end-market, particularly due to heightened demand for nearline HDDs [2] - Management anticipates that the rise of generative AI will lead to a refresh cycle in client and consumer devices, boosting content growth across smartphones, gaming, PCs, and consumer markets [3] Market Trends - The adoption of generative AI surged to 65% in 2024 from 33% in 2023, increasing demand for high-bandwidth memory (HBM) for AI servers and NAND flash for storage, which is essential for SSDs [4] - The growth in AI data is expected to drive eSSD sales, reshaping the storage market due to its speed, reliability, and efficiency compared to HDDs [4] Business Structure - In February 2025, Western Digital completed the separation of its HDD and Flash businesses into two independent, publicly traded companies, allowing each to focus on its specific market [5] Financial Expectations - Western Digital is projected to report quarterly earnings of $1.06 per share, reflecting a year-over-year increase of 68.3%, with revenues expected to reach $3.85 billion, up 11.4% from the previous year [6] - The consensus EPS estimate for the quarter has been revised 3.2% higher over the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [8]