Western Digital Corp (Western Digital (WDC)) shares are having a banner day on Tuesday, jumping more than 12% as investors pile back into memory and semiconductor stocks after a rough stretch. The broader tech rally — the Nasdaq is up 1.73% and the S&P 500 has gained 0.76% — is providing tailwinds, but the real fuel is coming from a series of bullish signals on memory pricing and AI demand.

The catalyst? A fresh call from Morgan Stanley analyst Joseph Moore, who told clients that the recent pullback in U.S. memory stocks is a gift. Moore forecasts memory prices will rise at least 25% from the second quarter to the third quarter of 2026, making the current dip a compelling entry point. That kind of conviction from a major Wall Street firm tends to get traders' attention.

But Moore isn't the only one talking up the memory market. SK Hynix (SK Hynix (SKHY)) Chairman Chey Tae-won added his voice to the chorus, saying AI-driven memory prices remain "abnormally high" and that the industry should focus on expanding supply rather than squeezing every last dollar from shortages. Chey also flagged expectations for overall memory demand to rise more than 50% to 60% next year, with AI-specific demand potentially climbing 60% to 100%. When the chairman of one of the world's largest memory makers talks about demand doubling, investors listen.

Adding to the positive vibe, Taiwan Semiconductor Manufacturing Co. (TSM) is reportedly planning to raise chip manufacturing prices by 5% to 10% in 2027, according to Bloomberg, citing Nikkei. The move is meant to offset higher costs for materials, equipment, and capacity expansion driven by strong AI demand. Higher chip prices tend to lift all boats in the semiconductor ecosystem, and Western Digital is riding that wave.

Looking ahead, the next big event for Western Digital is its earnings report on August 5. Analysts are expecting earnings per share of $3.27, up from $1.66 a year ago, on revenue of $3.69 billion — a 42% jump from $2.60 billion last year. The stock currently trades at a P/E of 29.2x, which is a premium to many peers, but the growth trajectory has analysts bullish.

The analyst consensus is a Buy, with an average price target of $463.91. Recent upgrades have been notably aggressive: Citigroup raised its forecast to $800 on July 13, Wells Fargo bumped its target to $730 on July 10, and even Susquehanna — which rates the stock Neutral — lifted its target to $500 on July 8. Those are big numbers, and they reflect a belief that the memory cycle has more room to run.

At the time of publication, Western Digital shares were trading at $548.72, up 12.58% on the day. Whether the rally has legs will depend on earnings and the broader tech narrative, but for now, the memory bulls are in control.