Western Digital Corp. (WDC) has seen its stock climb 72% year-to-date as demand for high-capacity data storage fuels a rebound in the memory sector. Analysts now debate how long the momentum can persist amid rising production capacity and shifting AI infrastructure needs.
- Western Digital stock up 72% year-to-date through January 7, 2025
- Q4 2024 revenue reached $2.8 billion, up 17% from prior quarter
- Enterprise SSD segment accounted for 48% of total sales
- 23% share of global enterprise SSD market, up from 18% in early 2024
- Signed $230 million contract with U.S. AI infrastructure firm in December 2024
- Forward price-to-earnings ratio at 27x, with analysts adjusting 12-month targets between $124 and $141
Western Digital Corp. has emerged as the top-performing stock in 2025, with its shares rising 72% through January 7, outpacing broader market gains and rival semiconductor firms. The surge is anchored in strong demand for enterprise and cloud-based storage solutions, driven by the exponential growth in AI training data and large-scale data center expansions across North America and Asia-Pacific. The company reported fourth-quarter revenue of $2.8 billion, a 17% sequential increase, with its enterprise SSD segment contributing 48% of total sales—up from 39% in Q4 2024. The company’s strategic pivot toward high-performance, energy-efficient memory drives has proven timely. Western Digital now holds a 23% share of the global enterprise SSD market, up from 18% in early 2024, according to internal product tracking data. Its new ULLtraDIMM 2.0 technology, designed for AI workloads, has secured contracts with five major cloud providers, including a $230 million deal with a U.S.-based AI infrastructure firm announced in late December. Despite the strong performance, market watchers caution that sustained growth may face headwinds. Global NAND flash production capacity is expanding, with Samsung and SK Hynix reporting plans to boost output by 28% and 31% respectively in 2025. This could pressure pricing and margins. Analysts at three major investment firms have revised their 12-month price targets for WDC between $124 and $141, reflecting mixed views on whether the current valuation, now at 27x forward earnings, is justified. The stock’s resilience has attracted significant institutional interest, with mutual funds and ETFs increasing their holdings by 14% over the past quarter. However, any sign of weakening demand from cloud providers or a shift in AI hardware preferences toward alternative storage architectures could trigger a sharp correction. Investors are closely monitoring upcoming earnings reports and supply chain indicators for early signals.