Is Western Digital Stock Underperforming the S&P 500?

With a market cap of $15.5 billion, San Jose, California-based Western Digital Corporation (WDC) is a leading global developer and manufacturer of data storage devices and solutions. It offers a wide range of products, including hard disk drives (HDDs), solid-state drives (SSDs), flash storage, and data storage platforms for consumer, commercial, and enterprise applications. 

Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Western Digital fits this criterion perfectly. With well-known brands like Western Digital, SanDisk, and WD, the company serves markets worldwide, including the U.S., China, Europe, and beyond.

Despite a 27.2% decline from its 52-week high of $61.16, shares of the data storage products maker have declined 1.5% over the past three months, a less severe drop than the broader S&P 500 Index’s ($SPX) 4.5% dip over the same time frame. 

In the longer term, WDC stock is down marginally on a YTD basis, which is a less pronounced decline than SPX’s 3.7% drop. However, shares of Western Digital have dipped 2.3% over the past 52 weeks, lagging behind the 8.4% return of the SPX over the same time frame.

Despite fluctuations, WDC has fallen below its 50-day and 200-day moving averages since mid-December 2024.

Shares of Western Digital rose 4.8% following its Q2 2025 earnings release on Jan. 29 as the company posted adjusted EPS of $1.77 and revenue of $4.3 billion, topping estimates. Investors were encouraged by a 41% year-over-year revenue growth, driven by a 119% surge in the Cloud segment, reflecting strong demand for both HDD and Flash products. Additionally, gross margin improved sharply to 35.9% while free cash flow turned positive at $335 million.

Positive sentiment was also fueled by management’s optimistic outlook on capturing AI-driven storage demand and the upcoming strategic split of Western Digital and SanDisk to unlock further value.

Moreover, WDC has experienced a less pronounced decline compared to its rival, Dell Technologies Inc. (DELL), which has dropped 13.4% over the past 52 weeks and a 14.3% dip on a YTD basis.

Despite WDC’s underperformance, analysts remain bullish about its prospects. The stock has a consensus rating of “Strong Buy” from the 20 analysts covering the stock, and as of writing, it is trading below the mean price target of $77.23.