Western Digital Hits a 52-Week High - Analyst Blog

Shares of Western Digital Corp. WDC hit a new 52-week high of $93.90 on Apr 1, eventually closing at $93.54. The closing share price also represents an extraordinary one-year return of 86.82% and a year-to-date return of 13.13%.

Some of the current optimism surrounding the shares is related to the company's business shift toward non-PC applications. In the last reported quarter, 34% of revenues came from non-PC applications. Moreover, the company has launched a string of storage devices (Thunderbolt-powered dual drive storage solution, My Cloud EX2 and USB 3.0 Touro S mobile external hard drives) under the mobile and cloud segment.

These product launches have come at an opportune moment as storage services related to smartphones and tablets are being adopted on a large scale. The company is expected to get good mileage from its cloud-based business.

Cloud-based storage has become extremely popular these days as it enables the access of content through different gadgets such as smartphone, tablets and personal computers.

To cater to this pent-up demand, Western Digital expanded its My Cloud solutions. These cloud-based solutions will help the company to meet growing business needs with improved flexibility and security. Since it is compatible with iOS and Android operating systems, users will be able to access data via smartphones or tablets.

Additionally, strategic acquisitions to expand its offerings in the solid state drive segment will place Western Digital in a better position compared to its peers Seagate STX, SanDisk Corp. SNDK and Fusion-io FIO.

However, sluggish macroeconomic condition coupled with declining PC market and higher investments on innovative products remain the headwinds. Nonetheless, the secular growth of digital data and growing exposure to the small and medium business space are long-term positives.

Currently, Western Digital has a Zacks Rank #2 (Buy).