Western Digital’s Capacity Locked Through 2028, Yet Stock Slides on Apple, Meta Demand Fears

Western Digital shares surge 6% to €500 but stay 28% below record. AI demand fills capacity, but Apple-CXMT threat, Meta oversupply fears, and SanDisk overhang cap upside. Analysts see just 3% gain.

On Friday, Western Digital shares climbed nearly six percent to close at exactly €500, but the bounce masked a deeper tension. The stock remains roughly 28 percent below its June record high, even as the company boasts that every bit of its production capacity for the current year is already sold. That disconnect — a booming order book paired with a volatile share price — has become the defining feature of this storied hardware maker’s transformation.

The numbers behind the rally are staggering. Over the past twelve months, Western Digital has surged about 790 percent, and since January it has delivered a 212 percent gain for shareholders. Yet the 30-day performance is a fractional loss of around two percent, and the stock’s annualized volatility has hit 103 percent — a profile more fitting of a speculative growth bet than an industrial stalwart. The bull case rests on rock-solid foundations: hyperscalers are vacuuming up hard drives for AI data centers, pushing cloud revenue to 89 percent of total sales. Consumer business now accounts for just five percent. Average selling prices have climbed 46 percent since last September, and management has secured multi-year commitments from key customers through 2028.

But a pair of threats from the tech giants themselves is unsettling the narrative. Apple is reportedly weighing a partnership with Chinese memory maker CXMT, a move that would inject a new source of supply into its mobile storage chain. For incumbents like Western Digital and Micron, that means pricing power on lucrative handset contracts could erode. Separately, Meta is accelerating its own infrastructure buildout, aiming to cut latency and tighten data control. The Facebook parent is even considering renting out idle compute capacity, stoking industry fears of a looming oversupply. Market observers increasingly talk about a plateau in AI hardware orders as the largest cloud operators shift from buying more gear to optimizing what they already have.

Adding to the near-term pressure is the unwinding of Western Digital’s stake in SanDisk. The company has been selling down its remaining shares through a multibillion-dollar equity offering and a debt-to-equity swap. Institutional investors have been exchanging SanDisk paper for Western Digital stock in bulk, creating a persistent overhang of sell orders. This process, combined with the broader cooling in memory stocks, is a principal reason the June highs have proved unreachable.

The analyst community remains broadly optimistic but sharply divided on valuation. Bank of America sets a price target of €732, while Wells Fargo is more conservative at €575. The consensus estimate sits at €493.52, barely above Friday’s close. With a market capitalization of roughly €180 billion, the stock already prices in much of the good news. The average fair value implies only about three percent upside from current levels.

All eyes now turn to the fourth-quarter earnings report due July 29, 2026, where Wall Street expects earnings per share of $3.28. The critical element will be management’s outlook on NAND flash demand — only a confident forecast can allay the oversupply fears that have crept into investor sentiment. CEO Irving Tan has repeatedly stressed that the data deluge from AI applications demands cheap, high-capacity hard drives, a structural shift that should sustain demand for years.

Yet the market is sending a brutal reminder that even the most ironclad revenue visibility — contracts running to 2028, factories sold out, a 46 percent price lift — cannot shield a stock from violent swings when sentiment shifts. Western Digital has morphed from a predictable hardware play into a high-octane AI proxy, and that transformation comes with a volatility tax. The fundamentals are intact, but the ride is anything but steady.