What happened
Western Digital posted $3.3B in Q3 2026 revenue, a 45.47% increase from the same quarter last year, driven by demand for AI inference storage. Goldman Sachs raised its price target to $650 from $400, and the company has beaten earnings expectations for four consecutive quarters with an average surprise exceeding 100 percent.
Why it matters
The company is benefiting from an extended NAND and HDD upgrade cycle tied to AI inference demand, positioning it to capture a structural shift in enterprise storage needs. However, insiders have sold heavily—125 insider trades in the past 6 months were all sales, with CEO Irving Tan alone selling 40,000 shares for an estimated $13,345,695.
What to watch
Analyst price targets range widely, with a median of $575.0 across 16 recent estimates. The stock trades around $567, offering roughly 15 percent upside to Goldman's $650 target, though insider selling activity may warrant caution.
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Western Digital is riding a wave of enterprise investment in AI infrastructure, particularly storage systems needed for inference workloads. The 45.47% year-over-year revenue growth in Q3 2026 reflects sustained demand as companies build out the computational infrastructure to deploy AI models. The company's track record of beating earnings expectations for four straight quarters—with average surprises exceeding 100 percent—suggests the revenue surge is outpacing even bullish forecasts.
Yet the insider trading data presents a countervailing signal. All 125 insider transactions over the past six months were sales, and senior executives including the CEO have liquidated substantial holdings. This pattern may reflect profit-taking after a strong run, or it could indicate that insiders view current valuations as stretched relative to near-term visibility. The wide dispersion in analyst price targets—from $500.0 to $900.0—underscores disagreement about how durable the AI storage cycle will prove and what multiple is justified.
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