Following Western Digital's (WDC) recent announcements, Morgan Stanley has raised its price target to a Street-high $369, citing AI as a key driver. The firm's optimistic outlook stems from robust technology roadmaps, margin expansion, and long-term financial goals. This positive sentiment reflects the growing demand for data storage driven by the expansion of AI infrastructure and cloud services.

WDC's strategic focus on AI and cloud storage has fueled substantial growth. The company reported record shipments in Q2, including millions of their latest UltraSMR HDDs. These high-density drives are popular with hyperscale data centers. WDC's stock has surged, nearly quadrupling in 2025 as investors bet on expanding datasets and rising HDD demand.

The company's Q2 earnings surpassed expectations, with a 25% year-over-year revenue increase and a 78% jump in EPS. Management has expressed confidence, announcing share repurchases and guiding for continued strong performance. Analysts are bullish on WDC, with a consensus rating of 'Strong Buy' and an average price target implying further upside potential.

With major cloud customers committed through 2026-2028, WDC is well-positioned to capitalize on the increasing need for data storage. The company's focus remains on high-capacity drives and intelligent storage platforms, catering to the booming AI/data economy. Investors should watch WDC as it continues to execute its strategy.