Western Digital Corporation (WDC) Jumped Following the Earnings Beat

Fred Alger Management , an investment management company, released its "Alger Capital Appreciation Fund" second-quarter 2026 investor letter. A copy of the letter can be downloaded here . US equities strongly rebounded in the second quarter, with the S&P 500 Index rising 15.2%. Easing geopolitical tensions and technological advancements fueled market optimism, propelling the Information Technology and Industrials sectors forward, while Energy and Utilities lagged due to falling oil and gas prices. Despite discussions on AI disruption, opportunities are identified within sectors adopting the technology as it enters its agentic phase. The Alger Capital Appreciation Fund's Class A shares outperformed the Russell 1000 Growth Index in the quarter, driven by strong performances in Information Technology and Communication Services, while Industrials and Financials detracted from overall performance. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its Q2 2026 investor letter, Alger Capital Appreciation Fund highlighted Western Digital Corporation (NASDAQ: WDC ) as a notable contributor. Western Digital Corporation (NASDAQ:WDC) is a data storage company that engages in the manufacturing and distribution of data storage devices and solutions based on hard disk drive (HDD) technology. On July 15, 2026, Western Digital Corporation (NASDAQ:WDC) closed at $513.84 per share. One-month return of Western Digital Corporation (NASDAQ:WDC) was -31.14%, and its shares gained 666.70% over the past 52 weeks. Western Digital Corporation (NASDAQ:WDC) has a market capitalization of $177.11 billion.

Alger Capital Appreciation Fund stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q2 2026 investor update:

"Western Digital Corporation (NASDAQ:WDC) is a hard disk drive (HDD) storage company benefiting from rising hyperscaler data-center investment and the continued proliferation of data. The HDD industry is highly consolidated, with only two scaled manufacturers, and Western Digital holds a leading market position. The business has structurally shifted toward cloud customers as consumer exposure has declined, with cloud representing the majority of Western Digital's revenue. Importantly, industry participants have emphasized capital discipline—prioritizing higher areal density (i.e., more terabytes per drive) rather than adding significant unit capacity—which supports a healthier supply/demand balance and improved profitability. Shares contributed positively to performance after the company delivered strong fiscal third quarter results. Revenue and earnings exceeded analyst expectations, driven by robust storage demand across cloud and enterprise markets and an improved pricing environment that lifted margins above the company's prior guidance."

Western Digital Corporation (NASDAQ:WDC) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . According to our database, 83 hedge fund portfolios held Western Digital Corporation (NASDAQ:WDC) at the end of the first quarter, up from 79 in the previous quarter. While we acknowledge the potential of Western Digital Corporation (NASDAQ:WDC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .

In another article , we covered Western Digital Corporation (NASDAQ:WDC) and shared the list of best performing AI stocks over the last 3 years. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.

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