Western Digital Shares Rebound as Cloud Demand Powers Strong Growth

Western Digital Corporation shares rebounded sharply, rising over 8% on November 11 to $313.31 following a wider recovery across storage and memory hardware makers. The rally followed fiscal first-quarter 2027 revenue of $4.38 billion, up about 55% from the prior year, alongside quarterly earnings per share of $4.64 that beat the consensus estimate of $4.11. Company management projected second-quarter revenue to expand 66% to 72% year over year.

The ongoing expansion is supported by demand from hyperscale cloud providers investing heavily in data center capacity, which requires substantial quantities of high-capacity nearline hard drives. Due to tight industry inventory levels, Western Digital has experienced stronger pricing power. In addition to expanding its top line, the company raised its quarterly dividend by 17% to $0.175 per share, payable on December 17 to shareholders of record as of December 4.

Wall Street opinions reflect notable upside according to several tracking services. MarketBeat reports an average rating of Moderate Buy with a consensus price target of $591.04, while ABC Money cited an average analyst price target around $609. Evercore ISI reaffirmed an Outperform rating recently. Data published by Yahoo Finance shows an average brokerage recommendation of 1.46 across 24 firms, with 18 Strong Buy ratings and one Buy. However, some firms have grown cautious, with Argus Research trimming its price target from $600 to $500 over cyclical execution risks.

Valuation assessments present contrasting views. Fundamental metrics highlighted by ChartMill show a forward price-to-earnings ratio of 7.56 and zero outstanding debt. In contrast, GuruFocus evaluated the company's valuation rank at 1 out of 10, calculating a proprietary intrinsic value of $103.62 and deeming the shares significantly overvalued. GuruFocus also pointed out that corporate insiders sold $72.2 million worth of equity over the past 12 months without any recorded purchases.

Looking forward, Western Digital is pursuing a planned split into two distinct publicly traded companies, dividing its operations between hard disk drives and NAND flash memory. Market participants view this corporate separation as a positive catalyst designed to improve capital allocation and better align each standalone business with its respective market cycle.