Western Digital's stock surged 11.27% intraday on Tuesday, extending a multi-session rally fueled by a wave of bullish analyst commentary and price target increases from major investment banks.

The sharp upward movement was primarily driven by a detailed research report from Morgan Stanley, which highlighted a severe and persistent supply-demand imbalance in the hard disk drive (HDD) market. The firm's analysis, based on a recent tour of the Asian supply chain, found that HDD demand is growing at 40% to 50% annually, significantly outpacing supply growth of just 30% to 35%. This shortage, driven by surging demand from AI data centers and cloud computing services, is expected to last at least through 2028, giving manufacturers like Western Digital significant pricing power.

Following Morgan Stanley's lead, several other major banks including JPMorgan, Citi, and Wells Fargo also raised their price targets on Western Digital. The bullish sentiment is further supported by the company's recent stellar financial performance, which included a 289% year-over-year jump in net income, underscoring its critical role as infrastructure for the AI boom.