12:30 PM EDT, 05/01/2026 (MT Newswires) -- Western Digital (WDC) is expected to benefit further from accelerating demand for hard disk drives after a "great"fiscal Q3 results, Morgan Stanley said in a Friday report.

"AI training, inferencing, and agentic workflows are driving accelerating HDD demand, supporting WDC's confidence

in >25% long-term nearline EB CAGR,"the report said.

The note said visibility is also extending, with some hyperscalers locking down capacity into 2029.

The note added that its June quarter gross margin guide of 51% to 52% was optically weak, but it reflects conservatism, rather than any weak pricing or cost trends.

"This quarter reinforces our bullishness on HDDs as a whole, and WDC,"the report said. Morgan Stanley boosted its price target to $488 from $380 while reiterating its overweight rating.

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