Why Western Digital (NASDAQ:WDC) Is Benefiting From AI-Driven Storage Demand and Tight HDD Supply Conditions

Western Digital Corporation (NASDAQ:WDC) is one of the best performing AI stocks over the last 3 years, with a 3Y CAGR of 173%. On June 15, Morgan Stanley analyst Erik Woodring maintained an Overweight rating and raised his price target to $650 from $488. Woodring’s thesis centered on a widening hard-disk-drive shortage. He estimated demand was growing 40% to 50% annually against supply growth of 30% to 35%, with cloud expansion and AI inference increasing storage requirements. Rising NAND flash prices also make high-capacity hard drives more economically attractive for some large datasets, supporting more predictable pricing. Western Digital shares gained 16% that day, leading the S&P 500.

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Bank of America reiterated Buy with a $732 target on July 1. The durability of the thesis depends on supply discipline and workload growth. If customers delay deployments, reuse existing capacity, or shift their storage mix, tightness could ease. For now, analyst attention has moved from unit volumes toward pricing power and data-center demand visibility.

Western Digital Corporation (NASDAQ:WDC) develops data-storage devices and platforms, with a primary focus on high-capacity hard disk drives used in cloud data centers, enterprise systems, video applications, and consumer storage.

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