Western Digital (NASDAQ:WDC) Shares Down 6.9% on Analyst Downgrade

Western Digital Corporation (NASDAQ:WDC)’s share price traded down 6.9% during mid-day trading on Tuesday after Zacks Research downgraded the stock from a strong-buy rating to a hold rating. The company traded as low as $406.81 and last traded at $411.04. 13,345,011 shares changed hands during mid-day trading, an increase of 54% from the average daily volume of 8,649,804 shares. The stock had previously closed at $441.64.

WDC has been the subject of several other research reports. Morgan Stanley reissued an “overweight” rating and issued a $676.00 target price on shares of Western Digital in a research report on Thursday, August 6th. Summit Insights lowered Western Digital from a “buy” rating to a “hold” rating in a research report on Thursday, August 6th. Cantor Fitzgerald raised their target price on shares of Western Digital from $660.00 to $900.00 and gave the company an “overweight” rating in a research note on Monday, June 29th. Mizuho set a $590.00 target price on shares of Western Digital in a report on Thursday, August 6th. Finally, Wall Street Zen cut Western Digital from a “strong-buy” rating to a “buy” rating in a research report on Sunday, August 16th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating and six have assigned a Hold rating to the company’s stock. According to MarketBeat, Western Digital has a consensus rating of “Moderate Buy” and an average price target of $534.56.

Insider Buying and Selling

In other news, insider Vidyadhara Gubbi sold 1,795 shares of Western Digital stock in a transaction that occurred on Friday, September 4th. The shares were sold at an average price of $459.87, for a total value of $825,466.65. Following the completion of the sale, the insider directly owned 80,571 shares in the company, valued at $37,052,185.77. The trade was a 2.18% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, CEO Irving Tan sold 20,000 shares of Western Digital stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total value of $8,899,400.00. Following the completion of the sale, the chief executive officer directly owned 575,966 shares of the company’s stock, valued at $256,287,591.02. The trade was a 3.36% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 25,437 shares of company stock worth $11,461,345. 0.18% of the stock is owned by corporate insiders.

Key Stories Impacting Western Digital

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

• Positive Sentiment: AI workloads are generating enormous volumes of data that require relatively inexpensive, high-capacity hard disk drives. This could support sustained demand for Western Digital’s enterprise-storage products, although the company must prove that the growth is durable. Seagate vs. Western Digital: Which HDD Stock Has More Room to Run?
• Positive Sentiment: Western Digital’s longer-term investment case has improved as AI-related storage demand reshapes the industry. The company has also demonstrated resilience after prior pricing downturns, dividend suspensions, and activist pressure. Western Digital Crushed the S&P 500 Over 10 Years. Now AI Is Changing Everything
• Neutral Sentiment: Western Digital was highlighted among stocks with strong sales, margins, and returns on capital, but the article did not identify a new company-specific catalyst. 3 Market-Beating Stocks Worth Investigating
• Negative Sentiment: Toshiba’s plan to nearly double HDD production for AI data centers raised concerns about future supply and pricing pressure. The news contributed to sharp volatility across Western Digital and Seagate. Is Western Digital (WDC) Fully Valued After Toshiba’s HDD Expansion Plan?
• Negative Sentiment: Zacks Research downgraded Western Digital from “strong buy” to “hold,” adding pressure after the stock’s substantial pullback and raising questions about limited near-term upside. Western Digital Rating Lowered to Hold at Zacks Research
• Negative Sentiment: Western Digital lagged memory-chip peers as investors favored companies with tighter, pre-sold supply. Analysts also cited bearish technical momentum and concentration risk, with one customer group representing 89% of revenue. SanDisk and Micron Rise as Tight Memory Supply Outruns a Softer Tech Tape
• Negative Sentiment: A jump in Treasury yields and a broad market selloff pressured storage stocks, while reports of discounted WD-branded drives raised additional questions about demand and channel pricing. Western Digital Stock Faces a Bearish Breakout Risk

Institutional Trading of Western Digital

Several hedge funds have recently bought and sold shares of WDC. Mowery & Schoenfeld Wealth Management LLC bought a new position in shares of Western Digital during the 2nd quarter valued at approximately $28,000. Dunhill Financial LLC purchased a new position in shares of Western Digital during the 2nd quarter worth about $29,000. Stonehage Fleming Financial Services Holdings Ltd purchased a new position in shares of Western Digital during the 2nd quarter worth about $31,000. Gables Capital Management Inc. bought a new position in Western Digital in the 2nd quarter valued at $32,000. Finally, Ares Financial Consulting LLC increased its stake in Western Digital by 45.5% in the second quarter. Ares Financial Consulting LLC now owns 80 shares of the data storage provider’s stock worth $51,000 after purchasing an additional 25 shares during the period. Hedge funds and other institutional investors own 92.51% of the company’s stock.

Western Digital Price Performance

The firm has a market capitalization of $147.19 billion, a PE ratio of 16.21, a price-to-earnings-growth ratio of 1.74 and a beta of 2.11. The stock’s 50-day moving average price is $461.80 and its 200 day moving average price is $474.01.

Western Digital (NASDAQ:WDC) last announced its quarterly earnings results on Wednesday, August 5th. The data storage provider reported $3.56 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.31 by $0.25. Western Digital had a return on equity of 48.15% and a net margin of 72.95%.The firm had revenue of $3.75 billion during the quarter, compared to analyst estimates of $3.70 billion. During the same quarter in the previous year, the business earned $1.66 earnings per share. Western Digital’s quarterly revenue was up 43.8% on a year-over-year basis. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. Equities research analysts forecast that Western Digital Corporation will post 19.65 earnings per share for the current fiscal year.

Western Digital Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th were issued a $0.15 dividend. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.2%. The ex-dividend date was Tuesday, September 8th. Western Digital’s dividend payout ratio (DPR) is currently 2.48%.

About Western Digital

Western Digital Corporation (NASDAQ: WDC) develops, manufactures and supplies data-storage products and solutions. The company’s portfolio is centered on hard disk drives (HDDs) used in cloud and enterprise data centers, personal computers, network-attached storage systems and other applications that require high-capacity data storage.

Western Digital markets products under brands including Western Digital, WD and Ultrastar. Its offerings include enterprise and data-center HDDs, storage products for business and consumer systems, and related technologies designed to help organizations store, manage and access large volumes of data.

Founded in 1970, Western Digital has evolved from a maker of electronic components into a global data-storage company.