Western Digital (WDC): Assessing Valuation After a Strong Share Price Rally in Tech

Western Digital (WDC) has seen shares climb sharply over the past month, driven largely by renewed optimism in the tech sector. Investors are keeping a close watch on the company as its long-term returns continue to stand out.

See our latest analysis for Western Digital.

With Western Digital's share price recently touching $131.31, the tech giant has built on steady momentum seen since the start of the year. Notably, its 1-year total shareholder return stands at 1.6%, and long-term holders have also enjoyed solid gains. This reflects a combination of renewed optimism and persistent confidence in the sector’s growth story.

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But with Western Digital’s recent rally and shares now trading above many analyst targets, investors are left to wonder whether there is still value to be found here or if the market has already priced in the company’s future growth.

Most Popular Narrative: 34% Overvalued

With Western Digital’s most tracked narrative setting fair value far below the recent close, its robust rally appears to have priced in a hefty portion of the expansion story. This sharp disconnect between narrative fair value and current share price is drawing heightened scrutiny from market watchers.

The explosive increase in unstructured data generated by AI applications, Agentic AI, and cloud-based services across industries is driving unprecedented storage needs. Western Digital's deep integration with leading hyperscalers (e.g., all top 5 with firm POs/LTAs covering the next 12, 18 months) positions the company to benefit from secular demand, directly fueling higher long-term revenue growth.

Read the complete narrative.

Want to know how Western Digital’s crowd-favorite thesis expects it to surge above today’s price? One controversial forecast for future profit margins could be the hidden driver, and the discount rate will surprise you. Find out which assumptions power this bold valuation call.

Result: Fair Value of $97.91 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a sudden drop in demand from key cloud customers or technological disruption could quickly challenge even the strongest assumptions in Western Digital’s outlook.

Find out about the key risks to this Western Digital narrative.

Build Your Own Western Digital Narrative

If you have a different perspective or want to draw your own conclusions from the numbers, it's easy to craft your own narrative in just a few minutes. Do it your way

A great starting point for your Western Digital research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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