Western Digital Shares Soars Despite Market Volatility

Shares of Western Digital Corp. (WDC) surged more than 6 % in early trading Tusday before giving back some gains after the computer hard drive manufacturer said it would spin off its flash memory business.

The decision comes amid lower demand for flash memory chips that has led to a supply glut in recent quarters. Last week, Western Digital abandoned lengthy discussions of a merger with Kioxia, a Japanese memory drive maker, which is owned by a consortium led by Bain Capital and is the former semiconductor unit of Toshiba.

Western Digital's decision to spin off its flash memory unit is a win for activist investor Elliott Investment Management, which last year advised the company to make such a move.

Western Digital first ventured into the flash drive business in 2016, when it acquired SanDisk, a California-based manufacturer of flash memory cards, for $19 billion. The spinoff of the flash memory unit will effectively unwind that transaction.

Western Digital shares were nearly 8% higher around 3:30 p.m. ET, after surging more than 10% early in the session. They've risen by almost a third so far this year.

Analysts at Wedbush Securities assigned an "outperform" rating for WDC, and are eyeing a price target of $60 per share.

Price Momentum
WDC is trading in the middle of its 52-week range and above its 200-day simple moving average.

What does this mean?
Investors are still evaluating the share price, but the stock still appears to have some upward momentum. This is a positive sign for the stock's future value.