Shares of Western Digital surged 3.5% to $575.03 as Wall Street's most aggressive AI-storage bet yet rippled through the market. On June 29, Melius Research initiated coverage with a "Buy" rating and a $1,050 price target — a figure that implies the stock would need to nearly double from today's levels. The call has reignited a fierce debate over whether the old-school hard drive business deserves a premium AI valuation.
• The Boldest Call on the Street Has a Simple Thesis: AI Needs Cheap Storage
Analyst Ben Reitzes, calling himself an "AI infrastructure bull," said hard disk drives offer long-term strategic value since AI fueled by video speeds up storage demand. His logic: as AI models process ever-larger video and sensor data, the sheer volume of bytes that need to be stored cheaply gives traditional hard drives — not just flashier memory chips — a durable role. Targets from analyst firms range from $500 (Susquehanna, Neutral) to $1,050 (Melius, Buy) , a gap that shows just how divided the Street is on how long this cycle lasts.
• A Parade of Upgrades Suggests This Isn't One Analyst Going Rogue
Cantor Fitzgerald revised its target to $900, BofA raised to $732, and Goldman Sachs upgraded from $400 to $650.
Wells Fargo also lifted its target to $730 from $575 on July 10. The breadth of upgrades tells investors that multiple research desks see the same supply-demand imbalance: BofA pointed to tight HDD supply, firm pricing, and exabyte growth above the company's own 25% long-term shipment goal.
• The Numbers Back the Hype — For Now
Q3 FY2026 revenue hit $3.34 billion, up 45% year over year, with gross margin above 50%.
Western Digital has posted four consecutive quarters of earnings beats with an average surprise exceeding 100%.
Management said HDD capacity is fully committed for 2026, backed by multi-year hyperscale agreements running through 2028–2029 , giving revenue unusual visibility.
• July 29 Earnings Will Settle the Argument
The Q4 FY2026 report due July 29 carries expectations of $3.27 EPS and $3.70 billion in revenue.
Bulls need gross margin holding above 50% with on-schedule 40-terabyte drive shipments to justify the lofty targets. Bears like Fox Advisors, who downgraded WDC on June 26, warn that HDD pricing expectations have run ahead of reality. With the stock still 28% below its $799 all-time high, the earnings print will determine whether $1,050 is visionary or fantasy.