Jim Cramer on Western Digital: “That Seems Too Rich to Me”

Western Digital Corporation (NASDAQ:WDC) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer mentioned the stock during the episode and said:

Western Digital’s down nearly 5%. It’s a memory stock that trades at 46 times earnings. That seems too rich to me.

A woman reading and analyzing stock market data. Photo by Artem Podrez on Pexels

Western Digital Corporation (NASDAQ:WDC) designs and supplies data storage solutions, including internal and external hard drives, portable drives, data center platforms, NAS systems, and related accessories. Cramer highlighted the company during the February 2 episode and stated:

Western Digital, the company that spun off Sandisk about a year ago, was in fifth place, up 45%. Micron is run by Sanjay Mehrotra, one of the founders of Sandisk. Strong bloodlines there… Wow, up big. Seagate was in third, up 48%, and Micron was in fourth, up 45%. Now, all these memory and data storage plays more than tripled last year thanks to surging demand from the data center, which is driven by artificial intelligence…

Western Digital also reported Thursday night, delivering a solid beat with excellent guidance, and the stock actually finished down more than 10% on Friday. Stock erased some of those losses today as the data storage plays came roaring back. But you have to keep in mind, sooner or later, someone’s going to add more production capacity, if not the American companies, then the Korean competitors. And once more capacity comes online, it might be hard to maintain these sky-high prices, but I don’t see any supply within this realm.

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