Western Digital (WDC): Valuation Insights Following AI Storage Launches and Renewed Tech Optimism

Western Digital (WDC) shares jumped as upbeat sentiment swept through tech stocks, fueled by excitement around artificial intelligence, Alphabet’s new Gemini 3 AI model, and fresh interest rate cut hopes. The rally was also supported by Western Digital’s new AI-focused storage solutions introduced at Supercomputing 2025.

See our latest analysis for Western Digital.

Western Digital's momentum keeps building, with the stock delivering a remarkable 151% year-to-date share price return and an even more impressive 182% total shareholder return over the past year. Alongside its big moves into next-generation AI storage and executive-backed growth plans, these numbers show investors are betting on a structural turnaround, especially as optimism around tech and AI continues to drive sentiment.

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With Western Digital riding a wave of AI-fueled optimism, the key question now is whether the market is overestimating its future gains or if investors can still find genuine value at current prices.

Most Popular Narrative: 13.9% Undervalued

Western Digital's most followed narrative sees fair value at $181 per share, above the last close of $155.41. This gap is notable and reflects confidence in the company's upward momentum and growth story.

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 to 18 months) positions the company to benefit from secular demand, directly fueling higher long-term revenue growth.

Read the complete narrative.

Curious how surging demand and bold partnerships shape this valuation? The details include bets on market expansion, improved profitability, and a discounted future profit multiple. Find out which expectations drive the fair value higher than today's price.

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 few major cloud customers and disruptions from shifting storage technologies could challenge Western Digital’s current growth trajectory.

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

Build Your Own Western Digital Narrative

If you want to take a hands-on approach and see the numbers for yourself, it's easy to build your own take on the story in under three 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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