Western Digital Faces Challenges but Analysts Remain Optimistic

Western Digital Corporation (WDC), based in San Jose, California, specializes in data storage devices and solutions. The company, with a market capitalization of $15.5 billion, offers products such as hard drives and solid-state drives, along with home entertainment and networking equipment.

Performance Overview

This key player in the data storage sector has lagged behind the broader market over the past year. Specifically, WDC shares have dropped 15.4%, while the S&P 500 Index ($SPX) has gained nearly 10.2%. However, in 2025, WDC’s stock has shown slight improvement, outperforming the SPX’s decline of 3.9% on a year-to-date (YTD) basis.

Sector Comparison

When focusing on the Technology Select Sector SPDR Fund (XLK), WDC’s underperformance appears less severe. The ETF has recorded a gain of about 6.4% over the last year, but WDC’s slight YTD gains surpass the ETF’s 7.3% drop for the same period.

Impact of Tariffs and Company Challenges

WDC’s stock took a hit following China’s 34% tariff on all U.S. imports, particularly impacting U.S. chipmakers. These tariffs could negatively affect profit margins and market share for Western Digital. Concerns have arisen due to potential additional regulatory actions from the previous administration. Although WDC is currently exempt from some tariffs, fears about targeted restrictions linger. Additionally, increased competition and waning demand for flash storage in consumer devices exacerbate the challenges facing WDC.

Recent Financial Results

On April 30, shares of WDC increased by 8% following the reporting of its Q3 results. The adjusted earnings per share (EPS) was $1.36, representing a 15.3% increase from the previous quarter. WDC reported revenue of $2.29 billion, surpassing Wall Street expectations of $2.25 billion. For Q4, the company projects an adjusted EPS between $1.25 and $1.65, with revenue anticipated between $2.3 billion and $2.6 billion.

Analyst Recommendations

For the ongoing fiscal year ending in June, analysts forecast a staggering 472.7% growth in WDC’s EPS, projecting it to reach $4.10 on a diluted basis. The company’s earnings history is mixed; it has either met or surpassed the consensus estimate in three of the last four quarters but missed predictions on one occasion.

Currently, among the 20 analysts covering WDC, the consensus is categorized as a “Strong Buy,” supported by 18 “Strong Buy” ratings and two “Holds.”

This outlook is more positive compared to a month ago, where only 15 analysts recommended a “Strong Buy.”

On May 1, TD Cowen analyst Krish Sankar maintained a “Buy” rating for WDC, lowering the price target to $58, signaling a potential upside of 28.8% from current levels. The average price target of $59.35 indicates a 31.8% premium compared to WDC’s current price. Notably, the highest price target of $100 suggests a significant potential upside of 122.1%.

On the date of publication, Neha Panjwani did not hold any positions in the securities mentioned. All information in this article is intended for informational purposes. Please view the Barchart Disclosure Policy here.

More news from Barchart

The views expressed in this article do not necessarily reflect those of Nasdaq, Inc.