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Valued at a market cap of $21 billion, Western Digital Corporation (WDC) operates in the data storage industry. The California-based company designs and manufactures a wide range of HDDs, SSDs, and flash storage solutions for various consumer and enterprise applications.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Western Digital fits this criterion perfectly. Western Digital is unique for its seamless integration of diverse storage technologies, offering a broad range of solutions that span from consumer-grade external drives to advanced enterprise storage systems, all under a unified ecosystem.
However, the data storage products maker has dipped 21% from its 52-week high of $81.55, reached in June. Over the past three months, shares of WDC have declined 19.7%, which lags behind The Technology Select Sector SPDR Fund's (XLK) decline of 6.2% during the same period.
Nevertheless, in the longer term, WDC has risen 23% on a YTD basis, outperforming XLK’s 12.8% gains. Moreover, shares of Western Digital have gained 47.6% over the past 52 weeks, compared to XLK’s 28.2% gains over the same time frame.
But, WDC stock has been trading below its 50-day moving average since mid-July and fluctuating around its 200-day moving average.
WDC's outperformance over the past year is driven by surging demand for AI-related memory, a growth in exabytes shipped for its cloud business, rising NAND flash prices, and the company's restructuring efforts, including the planned spinoff of its NAND business.
Moreover, despite beating Q4 adjusted EPS estimates on Jul. 31, the stock tumbled 9.7% the following day as the company reported lower-than-expected revenue of $3.8 billion and a weaker Q1 revenue forecast. Investor concerns were heightened by a slower recovery in demand for data center chips, which offset the gains from its flash memory business.
In comparison with its rival, Seagate Technology Holdings plc (STX) has lagged behind WDC, with a rise of 18.2% on a YTD basis. While STX has surged 57.1% over the past 52 weeks, outpacing WDC over the same time frame.
Due to the stock’s outperformance relative to the broader sector over the past year, analysts are optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 21 analysts covering the stock, and it is currently trading below the mean price target of $90.06.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
