JPMorgan (JPMorgan Chase) has upgraded Western Digital (SNDK-US) from 'Not Rated' to 'Overweight' following the company's 2026 Investor Day, setting a December 2027 target price of $2,250. Based on Friday's closing price, this represents approximately 37% upside potential.
Western Digital's stock soared over 7% on Friday (14th), closing at $1,641.11 per share. After-hours trading continued the momentum, rising 1.09% to $1,659.02, bringing its market capitalization to $239.6 billion.
Analyst Harlan Sur highlighted Western Digital's favorable positioning to capitalize on NAND demand growth driven by AI inference. Key reasons for the upgrade include long-term supply agreements, NAND market expansion, and technological advancements.
Western Digital has already signed eight long-term agreements, totaling approximately $94 billion at minimum pricing, with a weighted average contract duration exceeding four years. Even at minimum pricing, the company is expected to maintain gross margins of around 80%. The proportion of bit shipments covered by these contracts is projected to increase from over 50% in the 2027 fiscal year to about two-thirds in 2028.
Sur estimates that the global NAND total addressable market will grow from around $70 billion in 2025 to over $300 billion in 2026, potentially nearing $500 billion by 2027, primarily driven by AI data centers and inference demand.
On the technology front, Western Digital's next-generation BiCS10 has already entered early sampling, featuring a 332-layer, 2Tb QLC architecture that increases bit production per wafer by 65% compared to the previous generation. The company is also developing high-bandwidth flash memory to capture opportunities in the AI inference market.
Western Digital forecasts mid-to-high teens annual revenue growth from fiscal years 2028 to 2030, with gross margins around 80% and adjusted free cash flow margin around 50%. JPMorgan estimates the company's 2027 EPS could reach $250.
FACT BOX
- Source: PR Times
- Category: News
- Products / services: BiCS10