Pomegra
Western Digital (WDC) fell 7.7% and Seagate (STX) 7.3% as memory stocks sold off and UBS cut its WDC price target to $470 from $525 on supply concerns.
- Western Digital fell about 7.7% and Seagate about 7.3% in a broad memory and storage selloff on Tuesday.
- UBS cut its Western Digital price target to $470 from $525, a reduction of roughly 10.5%.
- Toshiba's plan to roughly double hard drive capacity and doubts over AI financing weighed on the sector.
Lead
Western Digital (WDC) shares dropped about 7.7% and Seagate Technology (STX) about 7.3% on Tuesday, October 13, 2026, as memory and data storage stocks sold off. The decline followed a decision by UBS (UBS) to lower its Western Digital price target to $470 from $525. WDC had already traded about 3.6% lower in pre-market trading near $372.95, before the selloff widened during the session.Why Did Western Digital and Seagate Shares Fall?
Western Digital and Seagate fell because investors marked down the outlook for hard disk drive pricing and supply, and because the wider semiconductor group came under pressure. The two companies dominate the market for high-capacity drives used in AI data centers, so they tend to move together on any change in supply conditions.
UBS tied its lower target to uncertainty over capacity trends and pricing in the hard disk drive market ahead of Western Digital's earnings report, expected in late October. Tight supply has supported the company's margin gains. Any sign that supply is loosening puts those gains in question.
What Does Toshiba's Capacity Plan Mean for Hard Drive Supply?
Toshiba's plan to roughly double its hard disk drive production capacity for AI-focused data centers raises the prospect of more supply reaching the market. The drive market has run tight, which has allowed Western Digital and Seagate to hold pricing and expand margins. More production from a third major supplier, particularly from Asia, would weaken that pricing power over time. Capacity additions take quarters to come online, so the immediate effect is on expectations rather than reported results.
Why Did Memory Stocks Sell Off More Broadly?
Memory stocks sold off because worries over the financing of AI infrastructure and competition from Chinese manufacturers hit the group at the same time. Micron (MU) fell about 5% and SanDisk (SNDK) fell about 5% in the same session. Reports of progress at China's ChangXin Memory Technologies on a new chip structure added to concerns about competition.
Micron technology stock and its peers have rallied strongly on AI-driven demand for memory and storage. High starting valuations leave little room for disappointment. Similar sharp declines hit Western Digital, SanDisk and Micron in August, when strong earnings failed to meet elevated expectations.
Market Reaction and Strategic Context
The selloff was concentrated in the stocks most exposed to AI data center spending. Hard drive makers have benefited as hyperscale cloud operators add storage for training data and archived content. That demand supports revenue, but the stocks now price in sustained tight supply, so changes in capacity plans move shares sharply.
For Western Digital, the late-October earnings report is the next test of whether pricing and margins are holding. For Seagate, the same supply debate applies, since any easing in industry capacity affects both companies.
Outlook
The immediate focus is Western Digital's earnings release in late October, which will show whether margins and pricing have held. The sector's direction depends on two questions: whether AI infrastructure spending stays on its current path, and how quickly competitors such as Toshiba bring added hard drive capacity to market. Until then, memory and storage stocks are likely to stay sensitive to financing news and supply signals.
Mentioned tickers: WDC, STX, UBS, MU, SNDK
