The Zacks Analyst Blog Western Digital, Seagate Technology and Sandisk

Core Viewpoint - The computer storage devices industry is experiencing a downturn due to concerns over AI trade and geopolitical conflicts, but long-term growth is expected driven by AI, cloud computing, IoT, and other technologies [2][3]. Group 1: Western Digital Corp. (WDC) - WDC is benefiting from strong demand in data centers and high-capacity HDDs, reflecting its ability to meet the needs of the AI-driven data economy [5][6]. - The company anticipates a client refresh cycle driven by generative AI, boosting storage demand across various sectors [7]. - WDC expects non-GAAP revenues of $3.2 billion (+/- $100 million) for the fiscal third quarter, representing a 40% year-over-year increase [9]. - The short-term average price target for WDC indicates a potential increase of 29.8% from its last closing price of $245.25, with a maximum upside of 79.4% [12]. Group 2: Seagate Technology Holdings plc (STX) - STX is also witnessing strong demand due to cloud and AI, with a strategy focused on balancing performance and cost efficiency [13]. - The company has strong demand visibility through long-term contracts, with high-capacity nearline production booked through 2026 [14]. - STX expects revenues of $2.9 billion (+/- $100 million) for the fiscal third quarter, indicating a 34% year-over-year improvement [17]. - The short-term average price target for STX suggests a potential increase of 32.4% from its last closing price of $352.80, with a maximum upside of 98.3% [20]. Group 3: Sandisk Corp. (SNDK) - SNDK is benefiting from the shift towards AI computing, which requires more NAND flash storage, leading to a favorable demand environment [21]. - The company reported a 76% year-over-year increase in datacenter revenues, driven by adoption from cloud hyperscalers [22]. - SNDK expects revenues between $4.4 billion and $4.8 billion for the third quarter, with gross margins projected to expand to 65-67% [24]. - The short-term average price target for SNDK indicates a potential increase of 32.9% from its last closing price of $527.33, with a maximum upside of 89.6% [26].