Western Digital (WDC) Shares Rise 1.8% as NAND Demand Rebounds

Shares of Western Digital Corp. (NASDAQ: WDC), the parent company that owns the SanDisk brand, closed at $68.42 on Monday, February 23, 2026, up 1.8% from the previous session’s $67.21 finish. The gain reflected renewed investor optimism about the NAND flash memory market’s recovery and Western Digital’s positioning to benefit from surging demand for high-capacity storage in AI data centers, enterprise servers, and consumer devices.

Western Digital’s market capitalization stood at approximately $23.8 billion at Monday’s close. The stock has climbed more than 65% over the past 12 months and is up roughly 22% year-to-date in 2026, recovering strongly from lows near $35 in mid-2025. Trading volume reached about 4.8 million shares, near average for the name.

The rally has been driven by a combination of improving NAND pricing, signs of inventory normalization across the supply chain, and growing recognition of Western Digital’s role in the AI infrastructure buildout. After a prolonged downturn in 2023-2024 marked by oversupply and price collapses, NAND flash spot prices have risen steadily since mid-2025, with 128Gb TLC NAND up more than 40% year-over-year according to TrendForce and other industry trackers.

Western Digital’s most recent earnings, reported January 30, 2026, for its fiscal second quarter (ended December 27, 2025), showed revenue of $4.3 billion (up 28% year-over-year) and non-GAAP EPS of $0.42 (beating consensus of $0.31). Flash revenue grew 39% sequentially and 45% year-over-year, fueled by higher average selling prices and strong demand for enterprise SSDs and client SSDs. HDD revenue rose modestly, supported by nearline drives used in cloud and AI storage.

CEO David Goeckeler highlighted the company’s “strong execution” in diversifying its portfolio and capitalizing on AI-driven storage needs. Western Digital has ramped production of high-capacity BiCS8 3D NAND (218-layer and beyond) and advanced QLC technologies, positioning it to meet demand for cost-effective, high-density storage in hyperscale data centers. The company also emphasized progress on its separation of flash and HDD businesses, with the flash unit (SanDisk-branded products) expected to operate as a standalone entity by late 2026 or early 2027, potentially unlocking value for shareholders.

Analysts have grown increasingly bullish. Consensus rating is Moderate Buy, with an average 12-month price target around $78-$82 (implying 14-20% upside from current levels). Recent updates include Morgan Stanley raising its target to $90 from $80 (Overweight), citing NAND price momentum and Western Digital’s strong position in enterprise and client SSDs. Deutsche Bank maintained Buy at $85, while a few firms hold Hold ratings with targets near $70, expressing caution over cyclical risks and competition from Samsung, SK hynix, Micron, and Kioxia.

The AI boom has become a key tailwind. Hyperscalers and cloud providers are deploying massive GPU clusters that require enormous amounts of high-performance, high-capacity storage for training datasets, inference caches, and checkpointing. Western Digital’s Ultrastar DC SN655 and SN850 enterprise SSDs, along with its high-density QLC drives, are gaining traction in these workloads. Analysts estimate that AI-related storage demand could drive NAND bit growth of 25-30% annually through 2028.

Challenges remain. The NAND market remains cyclical, and any slowdown in AI capex or renewed oversupply could pressure prices. Western Digital’s gross margins (around 32-34% non-GAAP in recent quarters) are improving but still lag peers due to higher manufacturing costs and ongoing foundry investments. The planned flash-HDD separation carries execution risk and potential short-term costs.

The company maintains a solid balance sheet with more than $2.5 billion in cash and manageable debt. Free cash flow turned positive in fiscal 2025, and management targets sustained positive FCF generation in 2026.

Looking ahead, Western Digital’s next earnings report is expected in late April or early May 2026 for the fiscal third quarter. Investors will watch for updates on NAND pricing trends, enterprise SSD demand, progress on the business separation, and any new AI-focused product announcements.

SanDisk-branded products — including portable SSDs, microSD cards, USB drives, and consumer storage solutions — continue to hold strong brand recognition and market share in retail channels. The brand benefits from Western Digital’s scale and technology leadership in flash memory.

As AI infrastructure spending accelerates and NAND supply-demand dynamics improve, Western Digital (and by extension SanDisk) appears well-positioned for further recovery. The stock’s recent strength reflects growing confidence in the company’s ability to capitalize on secular storage demand, though cyclical risks and execution hurdles remain.