Morgan Stanley raised its price target on Western Digital to $650 from $488 and reiterated an overweight rating on Monday, a move that coincided with the company’s shares reaching a new all‑time high and closing up 16.10 percent at $653.53 after an intraday peak of $658.80; the rally extended Western Digital’s winning streak to a third consecutive day.
The upgrade was heavy with specifics: Morgan Stanley argued investors are undervaluing Western Digital’s dual‑tracked UltraSMR/HAMR roadmap and said HAMR represents a source of reliability and strength rather than a technology gap versus peers. The firm also raised its earnings estimates, to $22.40 for next year and to $43.47 in 2028, and said Western Digital’s stock price holds the potential to double next year if the firm’s bull‑case pricing assumptions play out.
Market action followed immediately. The new $650 target, a roughly one‑third jump from Morgan Stanley’s prior $488 view, pushed traders to reprice the company during Monday’s trading session, carrying the share price to an intraday high of $658.80 and a record close at $653.53. That move put Western Digital among a small group of names on Wall Street now pulling attention away from larger, more established giants.
The upgrade’s technical case rests on the company’s roadmap: Morgan Stanley emphasized the dual UltraSMR/HAMR approach as the engine for bigger, more valuable drives and treated HAMR as evidence of competitive strength. Those conclusions underpinned the firm’s higher earnings trajectory and the assertion that current market levels leave room for a double under a favorable pricing scenario. The figures — a $650 target, $22.40 next‑year earnings and $43.47 in 2028 — are the concrete building blocks behind the firm’s bull case.
That same specificity exposes the friction in the market narrative. Morgan Stanley says investors continue to undervalue Western Digital’s roadmap even as those investors pushed the share price to record levels on Monday. The contrast is not merely rhetorical: either the market has begun to reprice the roadmap in one dramatic session, or the rally reflects a revaluation that still falls short of Morgan Stanley’s optimistic assumptions about pricing and margins. The firm’s claim that the stock could double next year depends explicitly on those pricing assumptions coming to pass.
The crucial question now is narrow and concrete: can Western Digital meet the bull‑case pricing assumptions that underpin Morgan Stanley’s leap in estimates and its $650 target? The answer will determine whether Monday’s record close is the start of a sustained re‑rating or a single, analyst‑driven spike that leaves the company’s longer‑term valuation still in question.
