Western Digital tumbles after huge run as AI and chip jitters hit high-flyers

Western Digital had a rough day, dropping about 8% to around $671 on heavy trading. For a stock that’s already up roughly 40% in a month and more than doubled in the last two, this kind of swing is uncomfortable but not totally surprising. The big question is less “What just happened?” and more “Is this the start of the end of the run, or just a sharp bump in a still-strong story?”

What actually happened today

The stock fell hard, much more than the overall market and even more than the tech sector, which was also down sharply. Trading volume was well above normal, which tells you a lot of people actively chose to hit the sell button, not just a quiet drift lower.

Price-wise, even after today’s drop, the stock is still sitting well above its recent average levels. It’s about 14% above its short-term average price and more than a third above its 50‑day average, and far, far above where it was earlier this year. In simple terms: this is still a very “elevated” and jumpy stock, even on a down day.

That combination – big prior run, high level, heavy volume, and a sharp one-day drop – usually means some investors decided to lock in profits, and others got nervous and followed.

Why it likely moved: three main forces

1. AI and tech stocks are getting punched, and WDC is caught in that storm.

Across the market, investors are rethinking how much they’re willing to pay for anything tied to AI. Big Tech (“Magnificent Seven”) has slipped into correction territory, AI-focused stocks globally are being sold, and chip stocks in particular are leading the pullback.

Western Digital is plugged straight into that AI build‑out story via hard drives for cloud and data centers. When people worry that AI spending might slow, or that companies are borrowing too much to fund it, anything seen as an “AI infrastructure winner” can get hit, even if its own recent results look great.

2. The stock had an extreme run, so profit-taking was almost baked in.

Western Digital is up about 320% this year, with roughly a 30% jump just last week alone. Recently, multiple write‑ups have been warning the rally might be “exhausted” or near a “decision point.” That’s technical‑analysis talk for: “This move has been huge; it wouldn’t take much for traders to cash out.”

With the broader AI and chip space wobbling, today looked like the kind of day where fast-money traders decided, “Enough, I’ll take my gains,” which then pressures the price lower for everyone else.