Morgan Stanley identifies Western Digital as top pick amid surging hardware demand

Morgan Stanley has singled out Western Digital as a major winner in the rapidly expanding market for data storage hardware, driven by insatiable demand from AI workloads and cloud computing. The firm raised its price target on WDC from $488 to $650 while maintaining an Overweight rating, a vote of confidence that sent the stock climbing. The core thesis is straightforward: hard disk drives are experiencing a demand renaissance, and Western Digital is one of only two companies on the planet that makes them at scale. The supply-demand math favoring HDDs Morgan Stanley’s analysts project annual HDD demand growth of 40-50%, a pace that meaningfully outstrips supply growth, which they estimate at 30-35%. The demand surge stems from hyperscale data centers and cloud service providers that need massive, cost-effective storage for the tidal wave of data generated by AI applications. While SSDs grab most of the headlines for speed, HDDs remain the workhorse for bulk data retention. Morgan Stanley describes the current HDD market cycle as being in its “middle phase,” suggesting the best may still be ahead. Western Digital’s stock responded accordingly, gaining between 7% and 16% following th...