Western Digital shares surged 5.18% during intraday trading on Wednesday, staging a sharp recovery as the storage sector rallied on the back of peer Seagate Technology's strong quarterly results.

The rally was primarily driven by Seagate's earnings report, which topped market expectations and sent its own stock climbing over 9% after hours. The upbeat results triggered an oversold recovery across the entire storage sector, lifting Western Digital and other memory-chip makers. The company also received a boost from its own positive outlook, with guidance indicating that first-quarter profit and revenue are expected to surpass market expectations. Adding to the bullish sentiment, Wedbush raised its price target on Western Digital from $540 to $650 while maintaining an Outperform rating, implying roughly 31% upside from recent levels.

The sector-wide rebound comes after a volatile stretch for memory stocks, which had previously declined over 12% in two consecutive sessions amid NAND industry headwinds and concerns over AI investment returns. The strong results from Seagate, combined with Western Digital's upcoming earnings report scheduled for August 5, have helped restore investor confidence. Analysts project Western Digital's revenue to grow nearly 49% year-over-year this quarter, with adjusted EPS expected to rise over 122%, reinforcing the bullish institutional views that the company's enterprise-driven storage portfolio remains on a solid growth trajectory.