Western Digital: This Bull Run May Just Be Starting
Western Digital is experiencing a strong revenue rebound driven by cloud demand and constrained supply, with Q3 sales expected to rise 40% year-over-year and adjusted EPS projected at $2.39. The company's long-term contracts with major cloud providers and a clear roadmap for higher-capacity drives support sustained growth. Despite a significant valuation increase, its PEG ratio remains very low, signaling strong growth potential. Analysts view WDC as a buy with favorable fundamentals and manageable competition.
- ▪Western Digital's Q3 sales are expected to increase 40% year-over-year with adjusted EPS projected at $2.39, up 75% from the prior year.
- ▪The company benefits from long-term contracts with major cloud providers and plans to release 40TB+ drives in 2026 and 100TB drives by 2029.
- ▪WDC's forward P/E has risen from 8x to 38x, but its PEG ratio remains low at 0.04x, reflecting high growth expectations.
- ▪Demand from cloud infrastructure and tight supply in the storage market are driving margin expansion and earnings growth.
- ▪Western Digital competes with firms like Seagate Technology and SanDisk in the data storage sector.
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