Western Digital Stock Has Fallen 53% Since June. I'd Consider a Small Position After Its Latest Report.
2026-10-24 01:07
•Daniel Sparks •The Motley Fool
•••••• •• Axe Cap view
Western Digital’s Drop Invites Cautious Interest
Despite a hefty 53% slide since June, Western Digital’s recent report offers a compelling, if risky, entry point.
Western Digital’s latest quarter delivered impressive numbers: 55% revenue growth and a 161% jump in earnings per share, alongside a dividend increase and a $1 billion buyback. Those aren’t figures you can ignore. Yet the stock is down sharply because investors worry that hard drive prices can’t hold up amid shifting supply and demand. The 15x forward earnings multiple looks like it already prices in much of this risk, suggesting the stock isn’t wildly expensive for what it promises. For South Africans, the direct play is limited since WDC isn’t JSE-listed, but it does matter indirectly. A continued slump in tech hardware shares would pressure the rand, which feeds into USD/ZAR moves. If you’re bullish on tech demand through AI and data-heavy applications over the next decade, this is a name to watch closely. That said, if pricing falls faster than expected, Western Digital could stumble further, dragging related tech sentiment with it. this is just our opinion and not financial advice
I’d consider a small, calculated position in Western Digital, waiting for more clarity on pricing trends before committing further. For rand investors, monitoring USD/ZAR for volatility linked to tech sector shifts makes sense.
- Western Digital (WDC)
- USD/ZAR
- Rapid decline in hard drive pricing
- Slower than expected tech demand impacting revenues
6/10
Western Digital reported strong fiscal Q1 2027 results with 55% revenue growth to $4.38 billion, 161% adjusted EPS growth, and a 17% dividend increase. Despite beating guidance and raising fiscal Q2 outlook to 66-72% growth, the stock has fallen 53% from its June peak due to investor concerns about hard drive pricing sustainability. The analyst suggests the valuation at 15x forward earnings reflects much of the pricing risk and recommends a small position, with the main risk being earlier-than-expected pricing declines.
Our take is based on reporting first published by The Motley Fool.