- Western Digital shares experienced a decline of nearly 10% during a broader semiconductor selloff, fueled by concerns regarding a pause in AI-related capital expenditures and macroeconomic headwinds.
- Potential supply competition has emerged following reports that Apple is considering a partnership with CXMT, which could introduce lower-cost memory supply and pressure Western Digital's high-margin contracts.
- Despite a recent multi-year guidance for revenue growth exceeding 20%, the stock maintains a premium valuation with a forward P/E of 54.21x, significantly higher than its historical mean.
Quotes
“A key factor is Apple's reported exploration of a partnership with Chinese memory supplier CXMT, which raises the risk of lower-cost supply entering Western Digital's markets.”
“WDC remains a Hold here, as the stock market also enters the seasonally softer Q3 months after the typically stronger June/July trading months, worsened by the elevated short interest ratio.”