Western Digital (WDC) shares are extending gains on March 17 after reports that the company has effectively sold out its entire HDD capacity for the remainder of 2026. Despite this rally, however, WDC’s relative strength index (14-day) sits at about 64 only, indicating bullish momentum may not be out of juice just yet.
Versus the start of 2026, Western Digital stock is up more than 50% at the time of writing.
Why Is the Capacity Update Bullish for Western Digital Stock
WDC’s update is bullish primarily because it signals unprecedented demand from hyperscale cloud providers racing to expand artificial intelligence (AI) infrastructure.
Now that Western Digital has secured firm purchase orders from its mega-cap clients, it’s free from the cyclical inventory risk that has historically plagued the sector.
In fact, its top seven customers have signed long-term agreements (LTAs) that legally bind them to buying exabyte volume over the next two years as well, offering exceptional visibility into future revenue.
These contracts warrant buying WDC shares as they enable the company to lock in pricing as well as volume for its high-margin 32TB and 40TB drives, transforming it from a commodity hardware vendor into a mission-critical utility for the AI data center boom.
Cantor Fitzgerald Favors Buying WDC Shares at Current Price
Cantor Fitzgerald continues to see Western Digital as a top pick for 2026, especially since it’s expected to be debt-free by the end of its current quarter.
This will make room for aggressive buybacks or dividend hikes, which may help drive WDC to a high of $420 over the next 12 months, the investment firm told clients in its latest research note.
According to its analysts, the company’s dual-path strategy in ePMR and HAMR technologies is a key differentiator.
Note that Western Digital shares are currently trading at about 32x forward earnings, which isn’t stretched for a company riding the AI wave.
Western Digital Remains Buy-Rated Among Wall Street Firms
Other Wall Street firms agree with Cantor Fitzgerald on Western Digital as well.
The consensus rating on WDC stock sits at “Strong Buy” currently, with price targets as high as $440 indicating potential upside of about 45% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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