Western Digital shares surged 6.04% in after-hours trading on Tuesday, rebounding from two consecutive sessions of sharp declines that had wiped out over 12% of the stock's value amid persistent NAND industry headwinds and concerns over increased competition from Chinese memory chipmakers.

The after-hours recovery was fueled by a broader oversold bounce across the storage sector, with peer Seagate Technology also surging over 9% in the same session. Adding to the positive momentum, investment bank Wedbush raised its price target on Western Digital from $540 to $650, maintaining an Outperform rating and implying approximately 31% upside from current levels, which provided valuation support for capital to re-enter positions.

Market attention is also building ahead of Western Digital's next earnings report scheduled for August 5, with consensus expectations for EPS of $3.24, further contributing to the after-hours recovery.