11 Cheap NASDAQ Stocks to Buy According to Hedge Funds

3. Western Digital Corp. (NASDAQ:WDC)

Forward P/E Ratio as of April 21: 7.44

Number of Hedge Fund Holders: 85

Western Digital Corp. (NASDAQ:WDC) develops, manufactures, and sells data storage devices and solutions. It offers client devices, such as hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook PCs, gaming consoles, and set-top boxes. It sells its products under the Western Digital, SanDisk, and WD brands to OEMs, distributors, dealers, resellers, and retailers.-

In FQ2  2025, Western Digital’s Cloud revenue reached $2.3 billion, which was 55% of the company’s total revenue of $4.3 billion. This Cloud revenue made a 6% sequential improvement, as well as more than doubled year-over-year, due to an increase in nearline HDD shipments. The HDD business as a whole achieved a 12-quarter high in revenue during this period.

This was driven by the increasing adoption of Western Digital Corp.’s (NASDAQ:WDC) newer and higher-density drives, particularly those using its cutting-edge Ultra SMR technology. On April 10, Benchmark upgraded the stock’s rating to Buy from Hold with a $55 price target. Benchmark cites the growth in data center spending by the major hyperscalers, the AI opportunity, and lower expected interest expense as a reason behind this improved sentiment.

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.”