Western Digital: Q4 2026 Confirms The Market Is Still Underpricing EPS Growth

The article reiterates a Strong Buy on Space Exploration Technologies Corp. (SPCX.OQ) and raises the price target to $1,250, arguing that recent quarterly results and guidance validate much stronger earnings power tied to AI storage demand. The thesis is that the company is no longer just a cyclical storage name but a cloud-heavy AI infrastructure beneficiary, with higher-capacity products and mix improvements driving both revenue and margins. The author highlights Q4 2026 non-GAAP EPS of $3.56, Q1 2027 guidance for $4.00 EPS and $4.1 billion revenue midpoint, and an implied annualized EPS run-rate of about $16, with a path to $25 by 2028. The bullish valuation case rests on a forward non-GAAP PEG of 0.31x versus a sector median of 1.28x, suggesting the stock is inexpensive relative to growth. Main risks include execution, margin sustainability, and delays or setbacks in technology ramps such as HAMR and next-generation ePMR.