Western Digital (NASDAQ:WDC) Shares Down 5.4% – Here’s What Happened

Shares of Western Digital Corporation (NASDAQ:WDC) traded down 5.4% on Wednesday . The stock traded as low as $518.28 and last traded at $519.17. 8,904,723 shares changed hands during mid-day trading, an increase of 0% from the average session volume of 8,904,478 shares. The stock had previously closed at $548.56.

Western Digital News Summary

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital reported fiscal fourth-quarter revenue of approximately $3.75 billion, up about 44% year over year, and adjusted earnings of $3.56 per share—both ahead of Wall Street expectations. Growth was supported by AI-related cloud storage demand, stronger pricing, and higher-capacity hard-disk drives. Western Digital Q4 Earnings Beat as Revenue Jumps 44% on Cloud Demand
• Positive Sentiment: Management highlighted strong visibility into AI-storage demand, with some customers negotiating capacity commitments through 2031. The company also expects continued margin expansion, while analysts remain broadly constructive; recent price targets include $630 from Baird and a $575 median across 15 analysts. Western Digital Says AI Customers Are Already Negotiating Storage Deals Through 2031
• Neutral Sentiment: The selloff is part of a broader rotation within semiconductor and memory stocks. Investors have been shifting toward AI networking leaders, while comparing Western Digital’s results with stronger results from rival Seagate Technology. Western Digital Slumps Despite Q2 Beat as Analysts Highlight Peer Seagate’s Results
• Neutral Sentiment: Western Digital declared a quarterly dividend of $0.15 per share, payable September 17 to shareholders of record September 8. The dividend provides a modest shareholder return but is unlikely to drive the near-term trading reaction.
• Negative Sentiment: Investors viewed fiscal-first-quarter 2027 gross-margin guidance of 55%–56% as insufficiently strong after the stock’s dramatic advance and elevated expectations. Although the outlook implies sequential improvement, it trailed the bar set by Seagate and was interpreted as evidence that the recent margin expansion may be stabilizing. Western Digital Shares Fall as Margin Outlook Tempers Strong Q4 Results
• Negative Sentiment: Profit-taking intensified because Western Digital had already rallied sharply on the AI-storage theme. The strong earnings beat therefore failed to exceed the market’s unusually high expectations, prompting a valuation reset and technical concerns around support levels. Sandisk, Western Digital Drag on Chip Stocks as Lofty Expectations Eclipse Strong Earnings
• Negative Sentiment: Reported insider activity has been heavily tilted toward selling, with 129 sales and no purchases over the past six months. While such transactions may reflect diversification or compensation, the lack of insider buying adds to near-term investor caution.

Analysts Set New Price Targets

Several research firms recently commented on WDC. Mizuho set a $590.00 target price on Western Digital in a research report on Thursday. The Goldman Sachs Group reiterated a “neutral” rating and issued a $400.00 price target on shares of Western Digital in a research report on Friday, May 1st. Evercore reiterated an “outperform” rating and set a $575.00 price objective on shares of Western Digital in a research note on Tuesday, May 26th. UBS Group cut their price objective on Western Digital from $560.00 to $525.00 and set a “neutral” rating for the company in a report on Thursday. Finally, JPMorgan Chase & Co. boosted their target price on shares of Western Digital from $530.00 to $650.00 and gave the company an “overweight” rating in a research note on Friday, June 12th. Two research analysts have rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and five have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus target price of $534.56.

Western Digital Trading Down 3.8%

The business’s fifty day simple moving average is $567.55 and its 200 day simple moving average is $417.23. The stock has a market cap of $149.69 billion, a P/E ratio of 17.94 and a beta of 2.14.

Western Digital (NASDAQ:WDC) last posted its quarterly earnings data on Tuesday, August 4th. The data storage provider reported $3.56 earnings per share for the quarter, beating the consensus estimate of $3.31 by $0.25. Western Digital had a net margin of 72.95% and a return on equity of 50.22%. The firm had revenue of $3.75 billion during the quarter, compared to analysts’ expectations of $3.70 billion. During the same quarter last year, the company posted $1.66 EPS. The company’s quarterly revenue was up 43.8% compared to the same quarter last year. On average, analysts predict that Western Digital Corporation will post 17.77 earnings per share for the current fiscal year.

Western Digital Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 17th. Investors of record on Tuesday, September 8th will be given a $0.15 dividend. This represents a $0.60 annualized dividend and a yield of 0.1%. The ex-dividend date is Tuesday, September 8th. Western Digital’s payout ratio is 3.58%.

Insiders Place Their Bets

In other news, insider Vidyadhara K. Gubbi sold 2,475 shares of the business’s stock in a transaction on Monday, June 1st. The stock was sold at an average price of $556.24, for a total transaction of $1,376,694.00. Following the completion of the sale, the insider owned 85,154 shares in the company, valued at $47,366,060.96. The trade was a 2.82% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, Director Bruce E. Kiddoo sold 750 shares of the company’s stock in a transaction on Thursday, May 28th. The shares were sold at an average price of $528.52, for a total value of $396,390.00. Following the transaction, the director directly owned 3,903 shares in the company, valued at $2,062,813.56. This trade represents a 16.12% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 5,093 shares of company stock valued at $2,751,337. 0.18% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in WDC. Dogwood Wealth Management LLC grew its holdings in Western Digital by 28.6% during the second quarter. Dogwood Wealth Management LLC now owns 90 shares of the data storage provider’s stock valued at $57,000 after purchasing an additional 20 shares during the period. Legacy Wealth Asset Management LLC increased its position in Western Digital by 1.0% in the second quarter. Legacy Wealth Asset Management LLC now owns 2,302 shares of the data storage provider’s stock worth $1,470,000 after buying an additional 22 shares during the last quarter. Everpar Advisors LLC raised its stake in shares of Western Digital by 1.8% in the second quarter. Everpar Advisors LLC now owns 1,442 shares of the data storage provider’s stock valued at $921,000 after buying an additional 25 shares during the period. Ares Financial Consulting LLC raised its stake in shares of Western Digital by 45.5% in the second quarter. Ares Financial Consulting LLC now owns 80 shares of the data storage provider’s stock valued at $51,000 after buying an additional 25 shares during the period. Finally, Dynamic Advisor Solutions LLC lifted its position in shares of Western Digital by 2.1% during the 2nd quarter. Dynamic Advisor Solutions LLC now owns 1,390 shares of the data storage provider’s stock valued at $888,000 after buying an additional 28 shares during the last quarter. 92.51% of the stock is currently owned by institutional investors and hedge funds.

About Western Digital

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.