Investors chasing Micron may be missing this storage stock’s record run

Western Digital stock NASDAQ:WDC has quietly became one of Wall Street’s strongest AI-storage trades this year.

While Micron remains the obvious name for investors chasing the memory boom, Western Digital has staged a sharper and less discussed turnaround.

The hard-drive maker’s stock is up roughly 200% in 2026, recently trading near record highs, after a run of results that challenged old assumptions about the storage business.

The headline number from its latest quarter was not just growth, it was profitability as Western Digital’s non-GAAP gross margin crossed 50% for the first time.

A margin milestone years in the making

Western Digital’s fiscal third-quarter results gave investors a clear reason to revisit the story.

Revenue rose 45% from a year earlier to US$3.3 billion (approx. $4.3 billion). That is strong growth, especially for one long viewed as cyclical and tied to the slower-moving hard-drive market.

The margin expansion was the real surprise. Non-GAAP gross margin reached 50.5%, up more than 10 percentage points from a year earlier.

Adjusted earnings per share came in at $2.72, almost double last year’s level.

The demand driver is not complicated, as AI systems create and store huge amounts of data. That data has to live somewhere, and high-capacity hard disk drives remain one of the cheapest ways to store it at scale.

Western Digital said exabytes sold rose 34% year over year, while average selling price per exabyte increased 9%.

In plain terms, the company shipped more storage and earned more for each unit of capacity.

Its cloud business now accounts for nearly 90% of revenue, showing how far the company has moved away from the old consumer-PC storage cycle.

Wall Street is taking notice

Analysts have been quick to adjust.

Evercore ISI raised its price target on Western Digital to $575 from $410 this week, while keeping an Outperform rating.

The firm said Western Digital and the hard-drive industry remain “critical and still underappreciated” parts of the AI infrastructure buildout.

Barclays went even higher, lifting its target to $620 from $450 and maintaining an Overweight rating.

Its view is that memory and storage remain the most attractive part of the semiconductor group below AI accelerators, with pricing upside likely to continue as supply remains tight.

Mizuho has also joined the chorus, raising its target to $550 from $470 with an Outperform rating.

Across Wall Street, the consensus remains positive. Current data show 23 analysts covering the stock, with a Buy rating and an average 12-month target of about $518.

Western Digital's rally reflects growing confidence that AI-driven storage demand is becoming a more important earnings driver.

Analysts continue to raise targets as cloud customers invest in the infrastructure needed to support increasingly data-intensive AI workloads.