11 Best Computer Hardware Stocks to Invest in Right Now

3. Western Digital Corporation (NASDAQ:WDC)

Number of Hedge Fund Holders: 66

Western Digital Corporation (NASDAQ:WDC) is one of the best computer hardware stocks to invest in right now. It operates as a technology company specializing in manufacturing storage solutions, including Solid State Drives (SSDs), Hard Disk Drives (HDD), and Flash Storage Drives.

The company exercises its competitive edge of higher gross margins and robust demand originating from cloud customers. As HDD accounts for nearly 90% of the data stored in public clouds, demand for its HDD and flash drives remains high. During the fiscal first quarter of 2025, Western Digital Corporation (NASDAQ:WDC) grew its Cloud segment revenue by 153% year-over-year. Management attributed the growth to higher shipments of its nearline HDDs and SSDs to data center customers.

Moreover, the company also differentiates due to its adoption of UltraSMR technology that enhances reliability and capacity of its storage solutions. While the overall revenue growth of 49% year-over-year is impressive, what’s more encouraging is a 34.3% increase in GAAP gross margins, which stood at 37.9% during the recent quarter. Western Digital Corporation (NASDAQ:WDC) is also improving its portfolio. On November 21, the company announced several high-performance and high-capacity portable SSDs, including SanDisk Extreme Pro and WD Black SN7100 NVMe. Management remains confident for its product demand to remain robust and is expecting $4.20 billion and $4.40 billion in revenue for the next quarter.

Parnassus Mid Cap Fund stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q2 2024 investor letter:

“We re-initiated a position in Western Digital Corporation (NASDAQ:WDC), a manufacturer of memory semiconductor chips and hard disk drives, as we believe earnings expectations are far too low. Semiconductors have been another of our most-alpha-generative industries, thanks to the industry’s secular tailwinds and our in-house expertise. Western Digital stands to benefit from the rapid growth of memory-hungry AI applications. The valuation for Western Digital was low relative to its peers, giving us a way to participate in AI at a reasonable valuation.”