Western Digital Corporation (NASDAQ: WDC) is a top-performing S&P 500 stock in 2025, with Morgan Stanley raising its price target to $228 and Cantor Fitzgerald to $250. Both firms recommend an overweight position in IT Hardware companies benefiting from cloud capital expenditures. Western Digital develops data storage devices globally based on HDD technology.

Despite potential in Western Digital, some AI stocks offer greater upside potential and lower downside risk. Morgan Stanley suggests an overweight allocation to AI-related stocks due to the favorable macroeconomic environment and exponential AI infrastructure spending growth expected in 2026. The firm advises maintaining positions in SOX amid market growth.

Investors are advised to consider AI stocks for potential growth amid market trends. For more information on the best short-term AI stock, check out the free report provided. Additionally, explore other stock options that are expected to double in three years or hidden AI stocks worth investing in. Disclosure: None. This article was originally published on Insider Monkey.

Read more at Yahoo Finance: Morgan Stanley Names Western Digital (WDC) a 2026 Top Pick Amid Cloud Capital Expenditure Boom