Cloud Spending and AI Workloads Push Western Digital (WDC) Higher

Core Viewpoint - Western Digital Corporation (WDC) is experiencing significant growth driven by cloud spending and AI workloads, with analysts highlighting several upcoming catalysts that could further boost the stock price [1]. Group 1: Company Performance - In the most recent quarter, Western Digital's revenue increased by 27% to $2.82 billion, indicating strong demand for its products [3]. - The company has improved its margins by focusing on selling higher-capacity storage solutions to data centers, particularly as AI customers require larger and more expensive drives [3]. - Shares of Western Digital have surged over 280% in 2025, effectively quadrupling in value over the year [1]. Group 2: Market Outlook - Revenue is projected to rise by approximately 23% in fiscal 2026, with growth expected to slow to around 13% in 2027, still indicating expansion [4]. - Morgan Stanley has raised its price target for Western Digital from $188 to $228, reflecting the company's strong exposure to cloud capital spending [1]. - The hard disk drive market remains robust, with customer demand continuing to improve, contrasting with typical cyclical trends in the tech hardware sector [1]. Group 3: Company Structure - Earlier in the year, Western Digital spun off its flash memory business into Sandisk, which now has a market value of roughly $35 billion, representing more than half of Western Digital's own valuation [4]. - Western Digital is known for its traditional hard disk drives, which are designed for large-scale data center use and can store massive amounts of data [2][5].