What Happened?
Shares of leading data storage manufacturer Western Digital (NASDAQ: WDC) jumped 6.6% in the afternoon session after positive analyst actions, including an upgrade to "Overweight" and a significant price target increase from Barclays. Barclays raised its price target on the company to $240 from $200, while keeping an "Overweight" rating. Separately, other analysts upgraded the stock to "Overweight," citing optimism about its future performance. This wave of positive sentiment from analysts was expected to boost investor confidence and attract more attention to the stock. The market reacted strongly to the news, pushing shares to an all-time high of $221.50 during the session.
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What Is The Market Telling Us
Western Digital’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 8% on the news that a broader market rotation out of the technology sector led to profit-taking following a recent rally.
The move was part of a wider trend that saw high-growth technology stocks fall, with the Nasdaq experiencing the sharpest decline among the major indices. Multiple reports indicated that traders were locking in profits, particularly from the artificial-intelligence trade, which had previously seen a strong run-up. This market action represented a shift in investor focus, as money moved out of tech. Defense stocks emerged as the primary beneficiary of this capital shift, surging after President Trump proposed a massive $1.5 trillion defense budget for 2027. Major contractors rallied on the news, with Northrop Grumman jumping over 10% and Lockheed Martin gaining nearly 8%, providing a counterbalance to the tech slump that kept the S&P 500 flat. The rotation into heavy industry was further supported by a stabilization in energy markets, as crude prices rebounded.
Western Digital is up 21.4% since the beginning of the year, and at $227.92 per share, has set a new 52-week high. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $4,451.
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