Why AI Is Fueling Western Digital’s Stock Surge Amid HDD Shortages

Western Digital (NASDAQ:WDC) has posted a 3‑year CAGR of 173%, making it one of the top AI‑related stocks. On June 15, Morgan Stanley analyst Erik Woodring kept an Overweight rating and lifted the price target from $488 to $650, citing a widening HDD shortage. Woodring projected storage demand growth of 40‑50% annually versus supply growth of 30‑35%, driven by cloud expansion and AI inference workloads. Rising NAND flash prices further boost the appeal of high‑capacity hard drives for large datasets. The stock rose 16% that day, outpacing the S&P 500. Bank of America reiterated a Buy rating with a $732 target on July 1. Analysts note the thesis hinges on continued supply discipline and workload growth; any delay in deployments or shift in storage mix could ease the tightness.