Cantor Takes WDC to $900 and Melius Opens at Buy as the HDD Shortage Tightens

Two Bull Calls in One Morning

On June 29, Cantor Fitzgerald lifted its Western Digital target to $900 from $660 and reiterated Overweight — a roughly 36% bump that pushed the firm's number near the top of the Street. Hours later, Melius Research opened coverage at Buy with a $1,050 target, staking out an even more aggressive figure. Two independent shops marking WDC up on the same day is the kind of confluence that moves a momentum name, and the perp followed: +7.61% over 24 hours to $622.20. This isn't the first time Cantor has chased the print higher — the firm has walked its target up the ladder all year, from $500 in late April as the HDD shortage thesis hardened.

The Shortage Underneath the Targets

Both calls rest on the same structural story. Western Digital has sold out its entire 2026 hard-disk-drive production to hyperscale AI data centers, with long-term agreements extending visibility into 2028. The supply picture is genuinely tight: HDD output is running an estimated 10–15% short of demand, and AI-driven storage consumption is growing far faster than capacity can be added. That mismatch is showing up in pricing and margins — WD has guided non-GAAP gross margin into the high-40s, a level it rarely touched in its commodity-drive past. Since the February 2025 SanDisk spin-off, WDC is a pure-play HDD maker, so unlike the memory names it isn't riding a NAND or DRAM cycle — the bid here is specifically about nearline disk going to AI clusters. The bull case is that this is a multi-year, structurally-short market, not a 2021-style memory spike.

The Valuation Is Doing the Heavy Lifting

The risk is simple arithmetic. WDC is up more than 240% year-to-date, and the multiple has expanded far beyond its historical range — the stock used to trade in the high-teens on forward earnings and now carries several times that. Each new target raise buys a thinner margin of safety, and a name up this much is exposed to fast profit-taking on any wobble in the AI-capex narrative or any hint that hyperscaler storage orders are pulling forward rather than compounding. The perp's +7.61% pop on analyst notes — rather than on company news — is itself a tell: at this altitude, sentiment and Street targets are doing more of the work than fresh fundamentals. The structural shortage looks real; the question every new buyer at $622 is underwriting is how much of it is already in the tape.