Remember when Western Digital was just that company making hard drives for your laptop? Yeah, well, they’re laughing all the way to the bank now. WDC stock absolutely demolished 2025, rocketing up 282% while the S&P 500 was doing its modest 16% victory lap. And 2026? They’re already up 29% in just two weeks. At this point, they’re basically the Usain Bolt of tech stocks.
So what’s the deal? Two words: AI storage. Turns out, when you’re training AI models that can write poetry, diagnose diseases, and probably judge your Netflix choices, you need somewhere to put all that data. And I mean A LOT of data.
Here’s where it gets interesting. The big cloud giants – Amazon, Google, Microsoft (you know, the usual suspects) – are basically throwing money at Western Digital for their next-gen storage drives. We’re talking about Heat-Assisted Magnetic Recording (HAMR) drives, which sounds like something Thor would use but is actually just really, really good at storing massive amounts of information.
All seven of WDC’s top hyperscaler customers have already placed orders through mid-2026, with five extending through the full year. One customer even locked in supply through 2027. That’s like booking your vacation three years in advance – you know it’s going to be good.
The numbers are pretty wild. Western Digital shipped over 2.2 million enterprise drives in just the September quarter, with capacities ranging from 26 to 32 terabytes. To put that in perspective, that’s enough storage to hold about 6,000 copies of every movie ever made. Per drive.
Wall Street is basically having a collective moment over this. Wells Fargo just bumped their price target from $180 to $260. Barclays raised theirs to $240. Morgan Stanley hit $228. The stock is already trading around $231, which means analysts are scrambling to keep up like they’re chasing a departing subway train.
But here’s the kicker – despite gaining 368% over the past year, WDC is still trading at just 23 times forward earnings. That’s actually pretty reasonable for a company riding the AI wave. It’s like finding a Tesla at Honda Civic prices.
The real question everyone’s asking: can this rocket ship keep flying, or are we looking at an Icarus situation? The data suggests there’s plenty of fuel left. AI isn’t slowing down – if anything, it’s accelerating. Every new AI model needs more storage than the last, and Western Digital is positioned as the go-to supplier for the companies building our AI-powered future.
Plus, they’ve got HAMR technology ramping up in early 2027, promising even higher storage capacities. It’s like they’re not just riding the wave – they’re building bigger surfboards.
The bottom line? While everyone was arguing about whether AI would take our jobs, Western Digital quietly became the company storing all the data that makes AI possible. Sometimes the best investment isn’t the flashy AI company everyone’s talking about – it’s the picks-and-shovels play that nobody saw coming.