What’s Behind the Jump in Western Digital’s Stock | U.S. Finance News
Western Digital (NASDAQ: WDC) stock surged by over 5% in Tuesday’s trading and stays up by close to 40% over the previous month. So what’s driving the stock larger?
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Authorization of Share Purchase Program
Western Digital introduced a new $2 billion share repurchase program, reflecting sturdy confidence in its long-term outlook. Effective instantly, the program permits for share buybacks through open market purchases, personal transactions, or underneath a Rule 10b5-1 plan. This initiative follows the latest launch of a quarterly dividend and reinforces the company’s shareholder-focused capital allocation strategy—prioritizing reinvestment, debt discount, and capital returns as outlined on Investor Day.
Strong Q3 Earnings
Western Digital (WDC) reported its first full quarter as an HDD-focused company in Q3 FY25, (June yr), delivering $2.3 billion in income—a 31% year-over-year increase regardless of a 5% sequential decline. Non-GAAP EPS rose 15% to $1.36, and gross margin improved to 40.1%, up 1.7 factors sequentially and 10 factors year-over-year. The Cloud section drove 87% of complete income, producing $2.0 billion, up 38% year-over-year, fueled by growing knowledge calls for from hyperscale cloud suppliers and AI adoption.
Positive Guidance
Looking forward to the fiscal fourth quarter ending June 27, 2025, Western Digital issued an upbeat outlook, projecting income of $2.45 billion ± $150 million and non-GAAP EPS of $1.45 ± $0.20—each forward of analyst estimates. The company expects to maintain sturdy gross margins between 40.0% and 41.0%, with non-GAAP working bills tightly managed in the vary of $330 million to $340 million. As AI adoption drives exponential knowledge growth, demand for high-capacity, cost-effective storage continues to rise. Western Digital’s concentrate on dependable, large-capacity HDDs positions it effectively to capitalize on this pattern.
WDC Stock’s Volatility
The increase in WDC stock over the final 4-year period has been removed from constant, with annual returns being significantly more risky than the S&P 500. Returns for the stock had been 18% in 2021, -52% in 2022, 66% in 2023, and 14% in 2024. The Trefis High Quality (HQ) Portfolio, with a assortment of 30 stocks, is significantly much less risky. And it has comfortably outperformed the S&P 500 over the final 4-year period. Why is that? As a group, HQ Portfolio stocks supplied higher returns with much less risk versus the benchmark index; much less of a roller-coaster experience, as evident in HQ Portfolio efficiency metrics.
We worth WDC stock at about $49 per share, which is roughly in line with the present market price. See our evaluation on Western Digital’s Valuation: Is WDC Stock Expensive Or Cheap? for more particulars on Western Digital’s valuation and how it compares with friends.
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
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