Software Stocks Plunge, Microsoft Faces Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 11h ago
0mins
Source: CNBC
- Microsoft Cloud Revenue Potential: During the earnings call, Microsoft indicated that if all newly available GPU resources were allocated to Azure, year-over-year cloud revenue growth could reach 40% instead of the current 38%, highlighting the need for better resource allocation to enhance revenue growth.
- Overall Software Sector Decline: Despite ServiceNow's better-than-expected results, its stock fell 12%, while Salesforce dropped approximately 7% due to market reactions, indicating a reevaluation of enterprise software services and compressing price-to-earnings ratios.
- Cybersecurity Companies Affected: Although CrowdStrike and Palo Alto Networks' business models remain unaffected by AI advancements, their stocks saw significant declines, with CrowdStrike down over 6%, reflecting market concerns over high price-to-earnings multiples.
- Upcoming Earnings Reports in Focus: Apple is set to release its earnings after the bell, with market attention on iPhone demand and management's insights on rising memory costs, alongside other companies reporting, creating a tense market atmosphere.
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Analyst Views on WDC
Wall Street analysts forecast WDC stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for WDC is 189.74 USD with a low forecast of 135.00 USD and a high forecast of 250.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
15 Buy
4 Hold
0 Sell
Strong Buy
Current: 279.700
Low
135.00
Averages
189.74
High
250.00
Current: 279.700
Low
135.00
Averages
189.74
High
250.00
About WDC
Western Digital Corporation is a developer, manufacturer and provider of data storage devices and solutions. It delivers hard disk drives (HDD) solutions for everyone from students, gamers, and home offices to enterprises and public clouds. The Company manufactures, markets, and sells data storage devices and solutions in the United States and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries. Its portfolio of technology and products addresses multiple end markets: Cloud, Client, and Consumer. Cloud is comprised primarily of products for public or private cloud environments and end customers. Through the Client end market, it provides its original equipment manufacturer (OEM) and channel customers a range of hard drive solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces. The Consumer end market offers a range of retail and other end-user products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Western Digital Stock Hits All-Time High Ahead of Earnings
- Stock Performance: Western Digital Corp. (NASDAQ:WDC) surged to an all-time high of $284 on Wednesday, closing at $279.70 with a 10.79% increase, reflecting strong investor optimism ahead of its earnings report.
- Earnings Expectations: The company anticipates revenues of $2.9 billion for Q2 FY2026, with a variance of $100 million, and diluted earnings per share of $1.88, plus or minus $0.15, driven primarily by data center demand.
- Innovation Day Event: On February 3, Western Digital will host an Innovation Day in New York to showcase key innovations aimed at addressing the growing data storage needs in the AI-driven economy, further solidifying its market position.
- Analyst Rating Upgrade: Mizuho raised Western Digital's price target from $240 to $265 while reaffirming an “outperform” rating, indicating strong market confidence in the company's future performance.
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SanDisk's Q3 Earnings Forecast Exceeds Expectations
- Revenue Forecast Surge: SanDisk's projected Q3 revenue midpoint of $4.6 billion significantly exceeds Wall Street's consensus of $2.77 billion, highlighting the company's robust growth potential amid surging demand from AI data centers.
- Profit Target Increase: The adjusted earnings per share forecast of $14 far surpasses analyst expectations of $4.37, reflecting a substantial enhancement in profitability and market recognition of its products.
- Stock Price Surge: Following the release of its strong earnings report, SanDisk's shares jumped over 17% in after-hours trading, not only demonstrating investor confidence in the company's future growth but also doubling its market capitalization to $79 billion in January alone.
- Market Sentiment Turns Positive: According to Stocktwits, retail sentiment for SanDisk flipped from 'neutral' to 'extremely bullish', indicating strong investor anticipation for the company's growth potential, particularly as customers begin adopting Nvidia's Rubin GPU.
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