On August 17, Western Digital rose 3.17% overnight, trading at $524.94 per share with turnover of $21.29 million, extending the post-earnings recovery trend following a sharp 13% single-day decline earlier this month.

On the news front, the storage chip sector continued to rally broadly, with SanDisk up over 5%, and Seagate Technology up over 2%. Global storage chip supply-demand imbalances are intensifying, with long-term supply agreements spreading from the three major manufacturers to second and third-tier players, as supplier pricing power reshapes bargaining dynamics across the industry chain. Elon Musk recently described storage chips as the sole bottleneck in the AI boom, noting demand growth far outpaces supply expansion.

Multiple investment banks have raised their target prices on Western Digital: Bernstein to $770, Morgan Stanley to $676, and BNP Paribas to $700, providing sustained support for the recovery. Options market sentiment also skews bullish, with institutional investors selling deep out-of-the-money puts, signaling confidence in downside support.

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