JPMorgan Maintains Bullish Outlook for Western Digital on Near-Line Demand
JPMorgan reiterated its Overweight rating and a price target of $57.00 on Western Digital Corp. (NASDAQ:WDC). The firm highlights the stock’s upward momentum, showing a 10.7% increase in the past week, boosted by robust demand in cloud and hyperscale storage sectors.
Factors Driving Near-Term Growth in Cloud & Hyperscale Demand
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Resilience to Tariffs: WDC’s strong relations with cloud and hyperscaler clients provide insulation against trade-cost pressures.
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Order Background: Secured orders from two major cloud providers extend revenue visibility into H1 2026.
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Diverse Revenue Streams: While enterprise, client, channel, and retail sectors contribute only 10-15% of $15.6 billion in annual revenue, robust demand from hyperscalers supports WDC’s HDD business.
Confidence Fueled by Product Roadmap
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High-Capacity Drive Launches: Successful deliveries of 26 TB CMR and 32 TB ultra-SMR models.
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Next-Gen Developments: Planned release of 28 TB CMR and 36 TB ultra-SMR in H2 2025, commencing customer qualifications in early 2026.
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HAMR Transition Progress: Advancements on heat-assisted magnetic recording drives are well received by customers, ensuring efficient ramp timelines.
Analyst Sentiment & Price Target Updates
Analysts are showing increased optimism as 16 brokers have recently raised WDC’s earnings forecasts, reflecting a solid storage upcycle. Investors can view the latest price-target adjustments across the market with relevant tracking tools.
Risks and Future Considerations
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End-Market Diversification: Keep an eye on the performance of enterprise and retail segments if demand in cloud slows.
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Supply Chain Stability: Any delays in HAMR production or component shortages might affect availability of near-line drives.
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Competitive Landscape: Watch for changes in pricing or capacity from HDD and emerging SSD competitors.
With strong cloud and hyperscale spending projected to continue, coupled with a clear roadmap for higher-capacity and HAMR drives, JPMorgan’s Overweight rating on WDC highlights sustained demand factors and responsible product execution.
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