Western Digital Corporation (WDC): Among Billionaire Paul Singer's Stock Picks with Huge Upside Potential

Yahoo

10-05-2025

We recently published a list of Billionaire Paul Singer's 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Western Digital Corporation (NASDAQ:WDC) stands against other stock picks with huge upside potential.
Paul Singer founded Elliott Investment Management in 1977 in New York. It is one of the oldest hedge funds under continuous management and is also one of the largest activist funds in the world. It is the management affiliate of American hedge funds Elliott Associates and Elliott International Limited. Launched in 1994, Elliott International Limited has consistently outperformed the S&P 500 index by ~5 percentage points annually since its inception, which is a track record mirrored by Elliott Associates. Paul Singer earned a BS in psychology from the University of Rochester and a JD from Harvard Law School. He then spent 4 years working in corporate law firms and the investment bank Donaldson, Lufkin & Jenrette before founding Elliott Investment Management. Elliott Management has 38 clients and discretionary assets under management (AUM) of $97.37 billion, according to the Form ADV dated 13 February 2025. The last reported 13F filing for Q4 2024 included $16.66 billion in managed 13F securities and a top 10 holdings concentration of 82.44%.
Singer has built a reputation on Wall Street for his aggressive tactics that often generate significant shareholder value by exploiting weaknesses in various asset classes. His initial approach to investing was to target companies and even governments while purchasing extremely distressed debt. In February 2025, Singer appeared on a Podcast titled 'In Good Company with Nicolai Tangen', where he also discussed what he believes is the reason behind bad investments. While bad luck remains a relevant factor, he believes that these failures result from oversights and inadequate and/or incorrect hedging strategies:
'Sometimes it's bad luck, but more frequently it's (that) we missed something. We missed. Or the hedges weren't, they weren't the right hedges. The tracking error was much more than we expected. At the beginning of my career, 1977 to like 1987, hedging was much more simple, because we were long a convertible bond and short the stock into which the convertible was convertible. So that's very straightforward. And tracking error wasn't really a factor. We've become much more sophisticated in hedging, in creating bespoke hedges for different kinds of trades. But even those don't work out exactly, you know, all the time. But sometimes, you know, the worst trades, and I don't mind mentioning them, it's a kind of a form of therapy and a pedagogical exercise. The worst trades are the trades that you misunderstand the risk. You put it into the wrong category.'
To compile the list of billionaire Paul Singer's 10 stock picks with huge upside potential, we sifted through Q4 2024 13F filings of Elliott Management from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 20 stock picks and ranked the stocks in ascending order of this upside potential. We have also added Elliott Management's stake in each stock as well as the broader hedge fund sentiment for it.
Note: All data was sourced on May 8.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A data center filled with racks of hard disk drives and solid state drives.
Elliott Management's Stake: $134.17 million
Number of Hedge Fund Holders: 85
Average Upside Potential as of May 8: 30.93%
Western Digital Corporation (NASDAQ:WDC) develops, manufactures, and sells data storage devices and solutions. It offers client devices, such as hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set-top boxes. It also offers external HDD storage products in mobile and desktop form.
In FQ3 2025, the company's Cloud end market generated $2 billion in revenue, which made up 87% of the company's total revenue. This was also a 38% improvement year-over-year, which was fueled by the increasing need for mass storage solutions driven by the growth of data due to enterprise workloads and the surge in AI-generated content.
While there was a 6% sequential decrease in near-line bit shipments due to customer deployment plans, the average price per unit in the cloud sector increased by 5% sequentially to $179. Western Digital Corporation (NASDAQ:WDC) has also secured long-term agreements that extend through H1 2026 with two of its largest cloud customers. On April 10, Benchmark upgraded the stock from Hold to Buy with a price target of $55 due to the company's developments in the flash memory and nearline drive segments.
Parnassus Mid Cap Fund stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q2 2024 investor letter:
'We re-initiated a position in Western Digital Corporation (NASDAQ:WDC), a manufacturer of memory semiconductor chips and hard disk drives, as we believe earnings expectations are far too low. Semiconductors have been another of our most-alpha-generative industries, thanks to the industry's secular tailwinds and our in-house expertise. Western Digital stands to benefit from the rapid growth of memory-hungry AI applications. The valuation for Western Digital was low relative to its peers, giving us a way to participate in AI at a reasonable valuation.'
Overall, WDC ranks 7th on our list of billionaire Paul Singer's stock picks with huge upside potential. While we acknowledge the potential of WDC as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WDC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.