7 Dirt Cheap Stocks to Invest In Now

2. Western Digital Corp. (NASDAQ:WDC)

Forward Price-to-Earnings Ratio: 8.13

Number of Hedge Fund holders as of Q2: 80

Western Digital Corporation (NASDAQ:WDC) is a technology company that develops, manufactures, and sells data storage devices. It is one of the dirt cheap stocks to invest in now as it continues to fire on all angles. The company delivered solid fiscal fourth-quarter results that affirmed strong demand for the company’s storage devices.

Revenues in the quarter were up 9% to $3.76 billion, driven by a 21% increase in cloud revenues as client revenue increased 3%. Western Digital Corporation (NASDAQ:WDC) also bounced to profitability with earnings per share of $1.44 compared to a loss of $0.20 a share.

The advent of the AI Data Cycle signals a turning point for Western Digital Corporation, which will cause fundamental changes in end markets and raise storage requirements while generating new sources of demand.

The AI revolution is the first clear catalyst that should catapult the company to new heights. While some businesses are concerned about artificial intelligence, demand for Western Digital storage solutions is expected to increase significantly.

The increasing computational demands of high-compute AI data centers will drive demand for data center storage solutions. It’s also important to keep in mind that enterprise spending on cloud-based platforms is still relatively new.

Western Digital Corporation (NASDAQ:WDC)’s data-center storage products are gaining prominence as cloud spending increases. Unsurprisingly, with a 29% year-over-year increase in sales, the company’s cloud segment was its biggest growth driver in the fiscal third quarter (which ended on March 29).

Amid the tremendous opportunities for growth, Western Digital is still trading at a discount with a price-to-earnings multiple of 8.13 and a sales forecast of over 50%.

In the second quarter, 80 hedge funds tracked by Insider Monkey held positions in Western Digital Corporation (NASDAQ:WDC), with total stakes amounting to nearly $4.06 billion. As of June 30, Millennium Management was the largest shareholder, holding a position valued at $379.707 million.

Here is what Parnassus Mid Cap Fund said about 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.”