Western Digital Corp. (NASDAQ:WDC) shares surged about 13% in Thursday’s premarket session after Micron Technology Inc.’s (NASDAQ:MU) stronger-than-expected quarterly results and bullish outlook boosted sentiment across the memory and storage sector.
A broader risk-on mood also supported the move, with S&P 500 futures rising 0.7% before the opening bell.
Micron Results Lift Memory Stocks
Micron reported fiscal third-quarter adjusted earnings of $25.11 per share on revenue of $41.46 billion. The company also forecast fiscal fourth-quarter adjusted earnings of about $31 per share on roughly $50 billion in revenue.
The strong outlook reinforced expectations for sustained demand across the memory market and helped lift other storage-related stocks, including Western Digital and SanDisk Corp. (NASDAQ:SNDK).
Western Digital Technical Picture Remains Bullish
Western Digital remains in a strong long-term uptrend. The stock is trading about 22% above its 20-day simple moving average of $592.54, 44.5% above its 50-day average of $500.30 and 162.9% above its 200-day average of $275.00.
The 20-day average remains above the 50-day average, while the 50-day average remains above the 200-day average, reinforcing the longer-term bullish trend.
Momentum indicators also remain constructive. The MACD is above its signal line and the histogram is positive, suggesting buying momentum is strengthening.
The next major resistance level is the 52-week high of $799.87. Initial support sits near the 20-day moving average at $592.54.
Earnings And Analyst Outlook
Western Digital is expected to report quarterly results on or around July 29.
Wall Street expects earnings of $3.27 per share, up from $1.66 a year earlier, on revenue of $3.70 billion, compared with $2.60 billion in the prior-year quarter.
The stock trades at about 38.5 times earnings and carries a consensus Buy rating. Recent analyst actions include Morgan Stanley and JPMorgan raising their price forecasts to $650, while Mizuho lifted its price forecast to $685 earlier this month.
Western Digital Benzinga Edge Rankings
According to Benzinga Edge, Western Digital scores highly for Momentum at 99.71 and Quality at 97.9, reflecting strong price performance and solid underlying fundamentals.
However, the stock scores lower on Value at 4.96 and Growth at 14.77, suggesting investors have already priced in much of the expected improvement in the storage cycle.
ETF Exposure
Western Digital is a notable holding in several exchange-traded funds, including the Roundhill Memory ETF (NASDAQ:DRAM), Castellan Targeted Equity ETF (NASDAQ:CTEF) and iShares Large Cap Value Active ETF (NYSE:BLCV). Changes in fund flows could influence demand for the stock.
Western Digital Price Action
WDC Stock Price Activity: Western Digital shares were up 12.76% at $726.00 during premarket trading on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
Login to comment