Western Digital (WDC) Surges 16.8%: Is This an Indication of Further Gains?

Western Digital (WDC) shares ended the last trading session 16.8% higher at $219.38. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 10.7% gain over the past four weeks.

Western Digital’s recent 16.8% surge reflects growing optimism around its positioning in the expanding AI and cloud computing landscape. The company is benefiting from robust demand for higher-capacity nearline storage, with cloud customers driving increased shipments. The company shipped 204 exabytes, up 23%, backed by strength in ePMR products up to 26TB CMR and 32TB UltraSMR. Western Digital aims to ensure scalability in HAMR qualification ahead of volume production in early 2027.

The rise of agentic AI is expected to further accelerate long-term data creation, strengthening demand across Western Digital’s platform business as both on-premise and cloud storage investments continue to expand. The rally was further supported by improving industry sentiment after Nvidia’s CEO delivered bullish commentary at CES 2026, signaling a favorable outlook for the broader memory and storage market.

For the second quarter of fiscal 2026, management anticipates ongoing revenue growth, supported by strong data center demand and better profitability driven by increased adoption of high-capacity drives. The company anticipates revenues of $2.9 billion (+/- $100 million), up 20%, driven by strong data center demand and HDD uptake.

This maker of hard drives for businesses and personal computers is expected to post quarterly earnings of $1.92 per share in its upcoming report, which represents a year-over-year change of +8.5%. Revenues are expected to be $2.91 billion, down 32% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Western Digital, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on WDC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Western Digital is a member of the Zacks Computer- Storage Devices industry. One other stock in the same industry, NetApp NTAP, finished the last trading session 1.5% higher at $106.62. NTAP has returned -10.6% over the past month.

For NetApp, the consensus EPS estimate for the upcoming report has changed +0.2% over the past month to $2.07. This represents a change of +8.4% from what the company reported a year ago. NetApp currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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