Western Digital Poised to Ride AI Wave Higher

NVIDIA Corp. (NVDA) has been a standout beneficiary of the artificial intelligence (AI) boom, but investors are now turning their attention to another AI player that could be poised for further growth: Western Digital Corp. (WDC).

Western Digital recently reported Q4 revenues of $3.75 billion, up 44% from a year ago, driven by strong demand for storage products. The company also expects Q1 FY27 revenues of $4.1 billion and gross margins of 55-56%, signaling continued momentum.

AI-driven demand for high-capacity data storage is expected to continue fueling Western Digital's growth, with the company generating a strong free cash flow of $1.28 billion in the fiscal fourth quarter of 2026.

The Zacks Consensus Estimate of $18.85 for WDC's earnings per share is up 165.1% year over year, and the average short-term price target stands at $664.77, representing a 53.1% upside from its last closing price of $434.30.