WDC just posted one of its best weeks in years. The stock jumped 19% in five days to close at $465.26 — a 58% gain over the past month. The real tension this week is not the rally itself, but the fact that short sellers barely moved.
Short interest is the most striking data point right now. Despite the stock's relentless climb, SI % of FF has barely budged — it was 8.1% in late March and remains near 7.9% today. Shorts added a token 1% on May 5. They are not capitulating. That represents a meaningful overhang that has survived a 57% price surge in a single month, suggesting conviction rather than complacency among the bears.
The lending market, however, offers little comfort to shorts hoping for an amplified move. Availability is loose — lending pool utilization is running around 15%, well off the 52-week high of 29%. Cost to borrow is just 0.44% annualised, close to a floor, and has been remarkably stable throughout the rally. That combination tells you there is no squeeze pressure in the borrow market. Shorts can stay short cheaply, and new shorts can enter without friction. What's more striking is the options read: the put/call ratio collapsed to 1.10 on May 5, more than two standard deviations below its 20-day average of 2.04. For a name that routinely trades with elevated put demand, a reading that low signals a genuine shift toward call buying — options traders chased the post-earnings rally hard, in sharp contrast to the measured behaviour of the short book.
The Street reaction to WDC's April 30 earnings has been emphatic. Nearly every major bank raised its target in the first days of May. TD Cowen and Citigroup moved to $500 from $325 and $405 respectively, both maintaining Buy ratings. Wells Fargo matched $500, up from $335. Cantor Fitzgerald took the most aggressive line, lifting to $660 from $500 on an Overweight. Baird also raised — to $450 from $310 — though on a more cautious Outperform. UBS moved its Neutral target to $375, providing the only real counterweight: the sceptics at UBS see the current price as fair value already, with the stock now trading above its level. The consensus rating remains Buy, with 16 analysts on that side. The mean target of ~$492 sits just modestly above the current price, meaning most of the Street sees limited near-term upside from here even after the target cascade — an important nuance after a 57% monthly move. EPS momentum scores rank in the 93rd percentile on a 30-day basis and 88th on 90 days, underpinning the earnings beat narrative.
The bull case centres on WDC's position in the HDD duopoly alongside STX and the secular demand pull from AI-driven data storage infrastructure — with WD announcing $42 billion in AI deals this week via its SanDisk unit. SNDK, the spun-out flash business, has surged even harder, up 40% on the week. STX itself climbed 33% over the same period. The storage complex moved as a cohort, validating the thematic rather than company-specific nature of the rally. The bear case is equally structural: heavy reliance on data centre demand, HDD cyclicality, and a valuation that has now expanded materially — the P/E has moved to ~37x and the price-to-book to 14.2x, both up sharply over 30 days.
On the insider side, the CEO and COO were active sellers into the rally. CEO Irving Tan sold approximately 19,400 shares across multiple tranches on May 1 for combined proceeds near $7.8 million, while COO Vidya Gubbi sold a further 4,674 shares on May 4 at $443 per share. These were clearly planned or at-the-money sales into the strength rather than distress signals, but they are worth noting: executives trimmed at prices well below where the stock closed the week, which either reflects pre-scheduled 10b5-1 plans or underestimated the earnings reaction.
The key thing to watch from here is whether short sellers — who have sat through a 57% drawdown without blinking — begin to reassemble or fold. With the mean analyst target now only 6% above the current price and cost to borrow at historic lows, the conditions for covering are present. Whether the data begins to show a sustained reduction in the 7.9% short base will be the clearest indicator of whether this week's move has changed any minds.
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