Western Digital stock surged to a record high on Monday after Morgan Stanley raised its price target to $650 from $488, citing strengthening hard disk drive demand driven by artificial intelligence data centers.
The stock closed at $653.53, up 16% on the day and finishing as the top performer in the S&P 500. Western Digital has climbed 1,036% over the past year, making it one of the market’s most dramatic turnarounds.
Morgan Stanley analyst Erik Woodring reiterated an Overweight rating and called Western Digital and Seagate his “most-favored Overweights” in the storage sector. The upgrade reflects a shift in how Wall Street views the hard disk drive industry, which has historically been cyclical and prone to downturns.
Morgan Stanley projects hard disk drive supply will fall 10% to 15% short of demand in 2026. The gap stems from a fundamental imbalance: HDD demand is growing at 40% to 50% annually, fueled by AI workloads and data center expansion, while supply growth is running closer to 30% to 35%, according to the firm’s estimates.
This supply-demand dynamic is translating directly into pricing power. Western Digital and Seagate currently price drives at around $14.30 to $14.90 per terabyte. Morgan Stanley projects prices could reach $25 to $30 per terabyte by 2027 and 2028, a significant increase that would boost margins and shareholder returns through larger stock buybacks.
Western Digital’s 2026 hard disk production capacity is essentially sold out, with the company committed to long-term contracts with major cloud hyperscalers. In February, CEO Irving Tan said the company was “pretty much sold out for calendar 2026” with firm purchase orders from its top seven customers, signaling the durability of current demand.
The pricing strength is already evident in customer behavior. J.P. Morgan analyst Samik Chatterjee noted that Seagate has stopped offering discounts to incentivize adoption of next-generation products—a sign that supply constraints have eliminated the need to compete on price. Western Digital declined to comment on its own discounting practices.
Woodring’s bull case for Western Digital extends even further, projecting the stock could reach $920 if demand and pricing surge more than the base case assumes. He wrote that “the drivers of HDD demand are broadening, visibility is elongating, pricing is strengthening, and our new bull cases are coming closer into play.”
Sources
- Barron’s — Morgan Stanley analyst Erik Woodring’s price target upgrade to $650 from $488, HDD supply-demand projections, pricing targets, and analyst commentary
- MarketScreener — Confirmation of Morgan Stanley price target raise from $488 to $650 with Overweight rating maintained
- Seeking Alpha — Western Digital bullish views at Morgan Stanley on HDD demand and HAMR roadmap
- Macrotrends — Western Digital all-time high stock closing price of $653.53 on June 15, 2026
- StocksToTrade — Stock movement from $563 close on June 12 to $639.83 close on June 15 with intraday high of $658.80
- PCMag UK — CEO Irving Tan statement on 2026 capacity being “pretty much sold out” with firm purchase orders from top seven customers
