11 Cheap ESG Stocks to Buy According to Hedge Funds

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1. Western Digital Corporation (NYSE:WDC)

Number of Hedge funds holding: 85

Forward P/E as of May 06, 2025: 8.19

Western Digital Corporation (NYSE:WDC) is a California-based global leader in the hard disk drive market. While providing data storage solutions, the giant is fully dedicated to preserving and protecting the planet. The company’s initiatives revolve around reducing, recycling, reusing, and saving for the generations to come.

Western Digital Corporation (NYSE:WDC) has a negligible total ESG risk score of 9.7. With the least environmental impact, a score standing at 1.6, we can consider it best-in-class. Similarly, the 4.0 and 4.2 scores of social risk and governance risk, respectively, reinforce the notion that the company is less likely to face any material financial impacts stemming from ESG challenges.

With an emphasis on optimizing utilization and total capacity while delivering high-end nodes, Western Digital Corporation (NYSE:WDC) aims to embrace sustainability. The company is targeting net-zero emissions of scopes 1 and 2, and in doing so, the management has adopted a decarbonization strategy and set time-phased priorities. This strategy involves 3% conservation actions, 0.5% on-site solar, and sustained traction on Renewable Energy acquisition. Coupled with the company’s aim to complete its transition to renewable energy through long-term power purchase agreements, it is all in for the environmental game.

In its journey to a greener future, the company hasn’t missed the two Ws—water and waste. Western Digital Corporation (NYSE:WDC) is undertaking various water conservation projects, including recycling wastewater for gardening purposes. The company seeks to implement capital expenditure-focused water recycling programs and Alliance for Water Stewardship certification for its factories. Additionally, WDC’s Easy Recycle Program is a testament to its waste disposal management, with a focus on achieving less than 5% of waste in landfills by 2030.

Western Digital Corporation (NYSE:WDC) is considered leaner than it ever was, gaining a new identity. The company’s installed base storage in the cloud is expected to grow at a CAGR of 23% within the next three years. This, along with the company’s recent technological innovations, offering some of the highest quality and capacity hard disk drives, makes it one of the best ESG companies to invest in.

Overall, WDC ranks 1st on our list of cheap ESG stocks to buy according to hedge funds. While we acknowledge the potential of WDC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WDC but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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