Prediction: This Will Be Western Digital's Stock Price in 2030

Western Digital's stock has rebounded around 7% since October 23, but remains 51% below its June record high. The hard drive maker's earnings per share grew 161% year-over-year. My estimate for the stock price in 2030 stands at about $500, based on adjusted earnings per share of $33.50 multiplied by a P/E ratio of 15. This would yield an 8% annual return before dividends.

While the stock is unlikely to reach the June high by 2030, Western Digital's revenue and profitability have shown impressive growth. First-quarter revenue jumped 55% to $4.38 billion, and adjusted gross margin expanded to 58.1%. The company's outlook is driven by higher prices for storage, with Western Digital's average price per terabyte increasing 28% year-over-year.

Management expects prices to remain elevated for the next few quarters. Assuming a $5.80 earnings figure for fiscal Q2 and matching that in the final quarters, fiscal 2027 earnings per share could reach around $22. With annual revenue growth of 12.5% and buybacks reducing share count, earnings per share could grow around 15% annually.

Western Digital's capital spending is focused on non-capex areas, suggesting support for pricing. While my estimate could be overly cautious, a rival's capacity could also drive prices down faster than costs. Overall, Western Digital appears to have a promising future, but modest returns around 8% are expected given the stock's volatility.