Western Digital Corporation (NASDAQ:WDC) is one of the best performing S&P 500 stocks in the last five years. Strong Demand for Memory Products Drives Investor Momentum Surrounding Western Digital (WDC) As of February 6, 2026, Western Digital Corporation (NASDAQ:WDC) shares continue to rise amid a surge in investor confidence, driven by strong demand for memory products. Amid strong share momentum, recent analyst updates incorporate the company’s second-quarter fiscal 2026 results. On February 6, 2026, ...

'All Boats Are Rising' in Data and Memory, Says Western Digital's CFO - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# 'All Boats Are Rising' in Data and Memory, Says Western Digital's CFO. Just Look at the Stocks.By [Nate Wolf]ShareResize-- ...

Core Viewpoint - Western Digital Corp (NASDAQ:WDC) is experiencing strong financial growth and has a positive outlook, supported by a new price target set by Barclays analyst Tom O'Malley at $325, indicating a potential upside of 16.73% from its current price of $278.41 [1][6]. Financial Performance - In Q2 2026, Western Digital reported revenue of $3 billion, reflecting a 25% increase year-over-year [2][6]. - The company's earnings per share (EPS) reached $2.13, surpassing the high end of their guidance range [2][6]. Product Delivery and Growth - Western Digital delivered 215 exabytes of data storage, marking a 22% year-over-year growth [3][6]. - The shipment of over 3.5 million units of its latest EPMR products indicates strong customer confidence in the company's offerings [3]. Margin Improvement - The gross margin improved to 46.1%, an increase of 770 basis points, attributed to a focus on higher capacity drives and effective cost control measures [3]. Strategic Initiatives - The company has secured long-term agreements with major customers, enhancing visibility into future demand [4]. - Western Digital is advancing its Hammer and EPMR roadmaps and has begun qualifying next-generation products, positioning itself for continued growth and innovation [4]. Stock Performance - Currently, WDC's stock price is $278.41, with a slight decrease of 0.46% or -$1.29 [5]. - The stock has fluctuated between $268.35 and $285.42 today, with the highest price over the past year being $285.42 [5]. - The company has a market capitalization of approximately $95.44 billion and a trading volume of 15.21 million shares [5].

Core Viewpoint - Western Digital Corporation has demonstrated strong financial performance and growth potential in the data storage industry, leading to an upgrade in stock rating by UBS. Financial Performance - Revenue for the second quarter of 2026 reached $3 billion, marking a 25% increase from the previous year [2][6] - Earnings per share (EPS) stood at $2.13, exceeding the high end of the company's guidance range [3] - Gross margin improved significantly to 46.1%, an increase of 770 basis points from the previous year, attributed to a strategic shift towards higher capacity drives and effective cost management [4][6] Product and Market Position - The company delivered 215 exabytes, reflecting a 22% year-over-year growth, driven by strong demand for nearline drives [3] - Over 3.5 million units of the latest generation EPMR products were shipped, indicating robust customer confidence [3] - Western Digital is advancing its Hammer and EPMR roadmaps and has begun qualifying next-generation products, positioning itself for continued growth [5] Stock Performance - UBS upgraded Western Digital to a "Buy" rating, increasing the price target from $230 to $285 [2][6] - The stock is currently priced at $278.41, with a trading volume of 15.21 million shares [5] - The stock's highest price over the past year was $285.42, while the lowest was $28.83 [5]

Core Insights - Western Digital Corporation (WDC) is a significant player in the data storage industry, manufacturing hard drives and solid-state drives, competing with firms like Seagate, Micron, Lam Research, Applied Materials, and Broadcom [1] Financial Performance - WDC has a Return on Invested Capital (ROIC) of 26.96% and a Weighted Average Cost of Capital (WACC) of 12.22%, resulting in a ROIC to WACC ratio of 2.21, indicating efficient capital utilization [2][6] - Seagate Technology Holdings (STX) has a higher ROIC of 35.65% and a lower WACC of 11.13%, leading to a ROIC to WACC ratio of 3.20, suggesting more effective capital utilization compared to WDC [3][6] - Lam Research Corporation (LRCX) also achieves a ROIC to WACC ratio of 3.20, with a ROIC of 38.61% and a WACC of 12.07%, outperforming WDC [3][6] - Micron Technology (MU) has a ROIC of 16.28% and a WACC of 22.09%, resulting in a ROIC to WACC ratio of 0.74, indicating less effective capital utilization compared to WDC [4][6] - Applied Materials (AMAT) and Broadcom (AVGO) have ROIC to WACC ratios of 1.93 and 1.75, respectively, showing varying levels of capital efficiency [4][5] Comparative Analysis - Overall, while WDC demonstrates strong capital utilization, Seagate and Lam Research outperform it in terms of the ROIC to WACC ratio, highlighting the importance of evaluating both metrics for understanding financial health and capital efficiency [5][6]

Group 1: Interest Rates and Economic Indicators - The central bank's policy rate remains at 2.25%, which was widely expected by economists [1] - The U.S. Federal Reserve has kept its key rate unchanged at approximately 3.6% after three cuts last year, indicating a stabilization in the job market and an upgrade in growth characterization from "modest" to "solid" [1] - Lower interest rates are particularly significant for Canadian homeowners, as many are renewing their mortgages this year [2] Group 2: Commodity Market Performance - Commodity prices positively influenced Canada's main stock index, which rose by 79.67 points to 33,176.07 [2] - The March silver contract increased by US$7.58 to US$113.53 per ounce, while the April gold contract rose by US$219.60 to US$5,340.20 per ounce [2] - Commodities are highlighted as a major sector for Canada, with silver and gold prices showing upward trends [3] Group 3: Stock Market Movements - The U.S. stock and bond markets remained stable, with the U.S. dollar stabilizing after a recent decline [4] - Seagate Technology experienced a significant gain of 19.1% after reporting better-than-expected profits, driven by demand from artificial intelligence applications [4] - Nvidia, a key player in the AI sector, rose by 1.6%, contributing to the S&P 500's performance, supported by a positive report from ASML regarding chip-making machinery [5] Group 4: Currency and Oil Prices - The Canadian dollar traded at 73.69 cents US, up from 73.42 cents US the previous day [5] - The March crude oil contract increased by US$0.82 to US$63.21 per barrel [5]

Company Performance - Seagate Technology experienced a significant stock increase of 19.1% after reporting a larger profit than analysts expected, driven by demand from artificial intelligence applications [2] - Nvidia's stock rose by 1.6%, contributing positively to the S&P 500, supported by a favorable report from ASML regarding chip-making machinery [3] - Amphenol's stock fell by 12.2% despite reporting stronger profits than forecasted, following a prior surge of 23% in the year [5] - Apple’s stock decreased by 0.7% ahead of its upcoming profit report, making it the heaviest weight on the S&P 500 due to its size [6] Market Overview - The S&P 500 index saw a minor decline of 0.57 points, closing at 6,978.03, while the Dow Jones Industrial Average rose by 12.19 points to 49,015.60, and the Nasdaq composite increased by 40.35 points to 23,857.45 [7] - The U.S. dollar stabilized after a recent decline, with Treasury Secretary Scott Bessent stating that the government is not intervening in the currency market and aims for a "strong dollar" [7] Industry Trends - Companies are under pressure to deliver solid profit growth following record stock price increases, as stock prices typically align with corporate earnings over the long term [6] - ASML's optimistic revenue forecast for 2026 has alleviated concerns about a potential bubble in AI demand, indicating sustained interest in AI technologies [4]

Core Viewpoint - Data storage stocks significantly outperformed the market in 2025, with four companies achieving over 200% gains, driven by a persistent memory chip shortage and high demand from AI workloads [1][4][5]. Group 1: Company Performance - Sandisk (NASDAQ: SNDK) was the best-performing stock in the S&P 500, soaring 559% in 2025 [1]. - Western Digital (WDC) experienced a 282% increase in stock price [2]. - Seagate Technology Holdings (STX) saw a 219% rise [3]. - Micron Technology (MU) had a stock price increase of 239% [3]. Group 2: Market Dynamics - A supply-demand imbalance led to significant price increases for memory storage products, with DRAM prices rising 170% and NAND prices climbing nearly 250% in 2025 [4][5]. - The demand for storage is primarily driven by AI workloads, which require substantial digital storage and memory compared to consumer devices [4][7]. Group 3: Current Trends - In early 2026, Sandisk is up 63%, Western Digital has climbed 23%, Seagate Technology is up 16%, and Micron Technology is 19% higher, while the S&P 500 index is up less than 2% [6]. - DRAM memory prices are expected to increase by 50% or more in the first quarter of 2026 compared to the fourth quarter of 2025 [5]. Group 4: Future Outlook - The ongoing demand for storage is expected to continue due to the rapid AI buildout, although supply adjustments may eventually occur [7][8]. - The four memory device providers currently appear promising for investors [8].

Core Viewpoint - Western Digital (NASDAQ:WDC) is a significant player in the data storage industry, with a new price target set at $230 by Evercore ISI, indicating a potential upside from its current trading price of $221.51 [1][5] Company Performance - The current stock price of WDC is $221.51, reflecting a slight decrease of 0.27% or $0.59, with a trading range between $216.83 and $229.99 during the day [2][5] - Over the past year, WDC has shown significant volatility, with a high of $230.48 and a low of $28.83 [2] Market Position - Western Digital's market capitalization is approximately $75.93 billion, indicating a strong position in the data storage industry [4] - The trading volume for the day is 8,950,350 shares, demonstrating active investor interest [4] Industry Trends - The ongoing AI trade is driving demand for memory chips, which benefits Western Digital and its competitors, including Micron and SanDisk [3][5]

Company Overview - Western Digital Corporation (NASDAQ:WDC) is a significant player in the data storage industry, recognized for its hard drives and solid-state drives [1] - The company's market capitalization is approximately $75.93 billion, indicating its substantial presence in the industry [4] Stock Performance - On January 16, 2026, Evercore ISI upgraded WDC to an "Outperform" rating, raising the price target from $190 to $230, reflecting confidence in the company's future performance [1][5] - Currently, WDC's stock is priced at $221.51, showing a slight decrease of 0.27% or $0.59, with fluctuations between a low of $216.83 and a high of $229.99 on the day [3][5] - Over the past year, WDC has experienced a high of $230.48 and a low of $28.83, indicating its volatile nature in the market [3] Industry Trends - The upgrade by Evercore ISI aligns with a broader trend in the industry, as both Western Digital and its competitor Seagate (STX) have seen significant stock rallies due to the ongoing AI trade, which is driving demand for memory chips [2] - Companies like Western Digital, Seagate, Micron (MU), and SanDisk (SNDK) are benefiting from the increased demand for memory chips driven by the AI trade [2]