Shares of Western Digital surged in early trading, rising roughly 9.2%, after a combination of analyst optimism, a stronger-than-expected quarterly report and industry revenue data suggested demand for storage tied to AI infrastructure is intensifying.
Analysts at Evercore ISI raised their price target on the stock to $575 while retaining an Outperform rating. The firm framed its view around the view that AI infrastructure buildout represents a durable, multi-year source of demand for hard disk drives. The analysts outlined a path in which the HDD industry could sustain greater momentum, projecting a potential sales compound annual growth rate of over 20% and an EPS compound annual growth rate in excess of 30% over the medium term. The reporting also noted that the firm raised its target to $575 from $500 while keeping its Outperform rating.
Company management reinforced that demand thesis during the most recent earnings call. CEO Irving Tan was quoted saying:
"The demand drivers are clear: Virtually every AI workload, from training, inference, agentic AI to physical AI, creates data that is stored persistently and cost-efficiently on HDDs."
Those comments came against the backdrop of Western Digital's fiscal third-quarter results for 2026, which beat consensus estimates. The company reported adjusted earnings per share of $2.72 versus a projected $2.36, and revenue of $3.34 billion compared with expected revenue of $3.23 billion.
Adding to the positive tone, a TrendForce industry report cited in market commentary showed that the global top five NAND Flash brands generated combined revenue of more than $38.9 billion in the first quarter of 2026, an increase of 83.7% quarter-over-quarter. TrendForce attributed the surge to demand for AI server infrastructure.
Western Digital also announced a 20% increase in its quarterly cash dividend, raising the payout to $0.15 per share, with the dividend payable on June 17, 2026. The higher payout contributed to the constructive investor reception.
The move in Western Digital shares took place alongside gains across memory and storage-related names. Stocks such as Micron, SanDisk and Seagate Technology also rose as investors reacted to the prospect of stronger memory and archival storage demand tied to AI workloads, suggesting a sector-wide re-rating may be underway.
Market indexes provided a favorable backdrop for risk-on positioning. The NASDAQ rose by 1.0%, the S&P 500 added 0.7%, and the Dow Jones increased by 0.2% during the trading session noted in market summaries. Intraday symbol performance snapshots included moves such as SNDK +6.51%, MU +14.18%, WDC +7.84%, STX +1.87% and IXIC +1.24%.
Investor momentum pushed Western Digital to a new 52-week high of $525.86 during the session. Market commentary tied the rally to what traders described as robust demand for storage capacity in AI data centers, which market participants say has contributed to shortages of HDD supply and created a favorable price and volume environment for manufacturers such as Western Digital.
In sum, a convergence of a high-conviction analyst upgrade, a stronger-than-expected earnings quarter, significant NAND revenue growth among top vendors and a supportive macro-equity backdrop combined to lift Western Digital shares and related memory and storage stocks during the trading session.