Western Digital (WDC)

Storage is crucial now for AI and more and more is needed.

Trades at a high 46x PE after a strong rally. Too expensive.

If we hit $120 oil because of the US-Israel-Iran war, memory stocks like this should be bought. Too expensive now.

Memory/storage is one of the hottest sectors. The best performer Sandisk gained 143%, Seagate 48%, Micron 45% and Western Digital 45%, because of surging demand from data centres, driven by AI. They reported last week a solid beat and excellent guidance. However, once competitors add more capacity, these high share prices may be hard to maintain.

Is up 88% in Q3, and one of the top S&P stocks in Q3. He owned this year ago, but it was flat. Glad to see the market recognizing it now.

After the spinoff of the flash drive business, this is now a hard drive disk business. Over time, solid-state drives have taken away from hard drive disks in modern computers. That's been a challenge for the storage companies. 

But AI has increased need for mass capacity storage at data centres, and those are hard drive disks. Tailwind for WDC. His firm tends to stay away from hardware in general. In AI, there are much cleaner stories with less cyclicality. He can't either recommend or criticize a buy on this one.

Competitive space, and cyclical. He sold last fall, but still follows it. 12-month price target of $58.30.

It's seen many upgrades recently.

When ASML reported its disappointing memory-chip earnings, he sold this one as a result. This business is so very cyclical; once sold off, takes anywhere from 2-6 quarters to come back.

ASML also talked about how China has built out facilities for memory chips. So, another supply of memory chips that will influence cyclicality in the space.

Storage solutions in the tech space. A smaller company compared to the biggies in the semiconductor space. No dividend. Wildly cyclical and volatile. A trade, not something his firm typically does.

A boring stock that's taken off. Niche of data storage and management. Carving out a position in infrastructure with edge computing. Still decent runway from here. No dividend.