11 Best Data Storage Stocks to Invest in According to Analysts

5. Western Digital Corp. (NASDAQ:WDC)

Average Upside Potential as of March 28: 57.44%

Number of Hedge Fund Holders: 85

Western Digital Corp. (NASDAQ:WDC) delivers data storage devices and solutions that span from HDDs and SSDs for client, enterprise, and consumer markets. Its product range addresses the storage needs of PCs, mobile devices, data centers, and various consumer electronics. The company caters to the evolving demands of digital data storage.

The company’s HDD segment achieved a 12-quarter revenue high of $2.4 billion in FQ2 2o25, which was up 76% year-over-year. This growth is fueled by the demand for high-capacity enterprise drives, particularly those utilizing UltraSMR technology. The company shipped a record 154 exabytes of nearline storage, with an average price per unit of $172.

The company’s data center revenue hit an all-time high in FQ2 due to cloud demand, which represented 55% of the company’s total revenue. Western Digital Corp. (NASDAQ:WDC) is focused on the continued adoption of UltraSMR technology and the ramp-up of new drives. For the FQ3, the company expects HDD revenue to decline sequentially by a mid-to-high single-digit percentage, but gross margins to improve by 0.5%.

Parnassus Mid Cap Fund stated the following regarding Western Digital Corp. (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.”