Western Digital's stock surged 5.02% in the night session, continuing its recent strong performance in the storage sector.

The rally was primarily driven by intensifying AI infrastructure demand and bullish institutional sentiment. SK Hynix's Chairman stated that AI semiconductor demand is expected to grow 60% to 100% year-over-year next year, while major manufacturers have virtually no substantial capacity expansion plans, implying a widening supply-demand gap. Morgan Stanley estimated that Q3 data center memory prices rose at least 25% quarter-over-quarter, noting that memory is increasingly becoming a primary bottleneck in AI infrastructure—a structural constraint expected to persist for years.

Additionally, multiple investment banks recently raised price targets on Western Digital, with Citi at $800, BNP Paribas at $660, and UBS at $560, signaling strong institutional confidence and visible capital inflows. Morgan Stanley maintained its positive stance on the storage sector, characterizing the recent pullback as an attractive buying window.