Is Western Digital (WDC) Priced Too High?

Is Western Digital (WDC) Priced Too High?

Wed, September 9, 2026 at 3:58 PM GMT+3 3 min read

Harbor Funds, an investment management company, released its Q2 2026 investor letter for "Harbor Mid Cap Value Fund". The letter can be downloaded here. Global equities experienced a sharp rally in Q2 2026, with the S&P 500 returning 15.2%, its strongest quarter since 2020, driven by a shift from software to hardware in the Artificial Intelligence capital spending cycle. Small caps outperformed large caps, with the Russell 2000® gaining 21.5% compared to the Russell 1000's 15.1%. Growth stocks led within large caps, while Information Technology rose about 33%, contributing significantly to the S&P 500's return. The Harbor Mid Cap Value Fund returned 13.99%, outperforming its benchmark, the Russell Midcap Value Index. Strong stock selection in Consumer Discretionary, Real Estate, and Financials contributed positively, although an underweight in Information Technology negatively impacted results. Despite ongoing economic uncertainties, the investment philosophy remains committed to a disciplined value approach. Check the fund's top five holdings for its best picks in 2026.

In its second-quarter 2026 investor letter, Harbor Mid Cap Value Fund highlighted Western Digital Corporation (NASDAQ:WDC). Western Digital Corporation (NASDAQ:WDC) is a data storage company that engages in the manufacturing and distribution of data storage devices and solutions based on hard disk drive (HDD) technology. On September 08, 2026, Western Digital Corporation (NASDAQ:WDC) closed at $477.30 per share. Over the past month, Western Digital Corporation (NASDAQ:WDC) returned 5.11%, and its shares are up 402.32% over the past year. Western Digital Corporation (NASDAQ:WDC) has a market capitalization of $172.09 billion, and its stock has traded within a 52-week range of $93.92 to $799.87.

Harbor Mid Cap Value Fund stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q2 2026 investor letter:

"We sold our position in Western Digital Corporation (NASDAQ:WDC) in the Information Technology sector. Western Digital has been one of the stock market darlings over the past year, as the company has benefited from the surging demand for hard disk drives to support the AI buildout. While positive momentum kept the stock in our hold range for some time, the earnings and cash flow did not keep pace with the stock price, and the stock became less attractive from a valuation perspective. The overall rank fell out of the hold range in the second quarter and the stock was sold."

Western Digital Corporation (NASDAQ:WDC) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 98 hedge fund portfolios held Western Digital Corporation (NASDAQ:WDC) at the end of the second quarter, up from 83 in the previous quarter. While we acknowledge the potential of Western Digital Corporation (NASDAQ:WDC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed Western Digital Corporation (NASDAQ:WDC) and highlighted the two AI storage stocks soared as the S&P 500 fell. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.