Western Digital (WDC): Valuation Check After AI Storage Pivot, Spin-Off, and Boosted Shareholder Returns

Western Digital (WDC) has quietly turned into a pure play on AI era storage, and the market is starting to notice. Multi year purchase orders, a business spin off, and higher shareholder payouts are reshaping the story.

See our latest analysis for Western Digital.

The stream of upbeat AI storage news, multi year purchase orders and capital returns has been backed up by price action, with Western Digital’s share price returning 158.6 percent year to date and a powerful 522 percent three year total shareholder return suggesting momentum is very much building.

If Western Digital’s AI storage run has caught your attention, this is a good moment to explore other potential winners among high growth tech and AI stocks that are starting to shape the next leg of the cycle.

With Western Digital now a focused AI infrastructure play, earnings estimates racing higher, and the stock still trading at a discount to analyst targets, investors face a pivotal question: is there more upside ahead, or has the market already priced in the next leg of growth?

Most Popular Narrative: 11.4% Undervalued

With Western Digital last closing at $159.99 against a narrative fair value of about $181, the current setup suggests upside that still is not fully reflected in the price.

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 (for example, all top 5 with firm POs/LTAs covering the next 12 to 18 months) positions the company to benefit from secular demand, directly fueling higher long-term revenue growth.

Read the complete narrative.

Want to see how this demand story turns into a higher fair value? The narrative quietly bakes in rising revenues, expanding margins, and a richer future earnings multiple.

Result: Fair Value of $181 (UNDERVALUED)

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

However, heavy reliance on a handful of hyperscalers, along with faster adoption of alternative storage technologies, could derail the bullish AI storage narrative.

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

Build Your Own Western Digital Narrative

If you see the story differently or want to stress test the assumptions with your own inputs, you can build a personalized view in minutes, Do it your way.

A great starting point for your Western Digital research is our analysis highlighting 4 key rewards and 1 important warning sign 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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