Value Pick of the Week

Western Digital (WDC) — Western Digital has been making digital storage devices since 1970 and is one of only three companies manufacturing in that space, the other two being Seagate Technology (STX) and Toshiba. On May 19, 2026, WDC announced that its new hard drives integrate National Institute of Standards and Technology (NIST) approved post-quantum cryptography (PQC), becoming the first company to deploy quantum-resistant security in production storage systems. This is what convinces me that, despite the 183% gain already seen this year, WDC has a lot of room to grow. In addition:

  • Based on 61 Wall Street analysts, the consensus rating is “Buy,” with 44 Buy ratings, 16 Hold ratings, and just 1 Sell.
  • Q3 fiscal 2026 results beat expectations on revenue, and EPS nearly doubled year-over-year.
  • Gross margin crossed 50% for the first time ever, landing at 50.5%, driven by higher-capacity nearline drive mix.
  • The stock is more volatile than 75% of American stocks, typically moving about 11% a week — be prepared for some fluctuations.

Market Summary

The S&P 500 rose 0.6% for the week, recovering from an early decline that ran from Monday through Wednesday.

  • Geopolitical de-escalation was the dominant theme — markets rallied on hopes for a U.S.-Iran peace deal.
  • Thursday was the standout session — the S&P 500 gained 1.9% and the Nasdaq rose more than 2.5% on comments from President Trump indicating progress toward a diplomatic resolution with Iran.
  • Oil prices fell sharply on the de-escalation news — WTI crude declined to around $87 per barrel on Thursday and fell further to $84 by Friday, easing inflation-related anxiety tied to energy costs.
  • Looking ahead — the following week features rate-setting meetings from both the Federal Reserve and the Bank of Japan, which markets will be watching closely given the hot CPI and PPI reports.

One other notable event this week: the SpaceX (SPCX) IPO on Friday opened at $135 and gained 19% on its first day to close at $160.95. It was the largest IPO in history and made Elon Musk the world’s first trillionaire. The closing price puts SPCX at a market capitalization of $2.21 trillion, close to the value of Amazon (AMZN) at $2.54 trillion. Morningstar places the fair value of SpaceX at only $780 billion — less than half its IPO valuation — which puts the implied fair value share price at roughly $57, prompting some analysts (including me) to question whether the price tag is justified. I’m taking a wait-and-see approach to SPCX. I think it’s going to follow the trend of other high-profile tech IPOs — Facebook comes to mind — which lost significant value in the months following their debut.

How Our Picks Fared

Our past picks had a strong week, gaining 4.7% on the S&P 500 benchmark. Two companies gained more than 10%, 12 gained more than 5%, and 34 beat the S&P 500 for the week.

📉 Oracle (ORCL) fell 13.8%

  • This is the “beat and raise, but the market sold it anyway” story — a striking example of how guidance details can overwhelm even record headline numbers.
  • Oracle reported record Q4 FY2026 revenue up 21% YoY, with EPS beating consensus. Cloud infrastructure (OCI) revenue surged 93%, and the total backlog hit a record $638 billion — up 363% YoY.
  • Q1 FY2027 guidance actually topped expectations for both revenue and EPS.
  • Shares fell 12.6% in the Thursday session after the report because the earnings release also disclosed a capital spending commitment that alarmed investors focused on free cash flow and dilution.
  • The market’s verdict: even with a $638 billion backlog, investors are growing anxious about how much cash burn and shareholder dilution it will take to convert that backlog into delivered — and profitable — AI infrastructure.
  • For buy-and-hold investors, Oracle’s situation is a classic “short-term pain for long-term gain” compared to companies that only look as far as the next quarter.

📈 ASML Holding (ASML) rose ~13.5%

  • ASML’s gain was a multi-day combination of company-specific news, sector sentiment, and a bounce-back from a prior selloff.
  • On June 8th, shares rose 5.81% after Elon Musk publicly called ASML “arguably the greatest company in Europe.”
  • A cluster of analyst upgrades reinforced the move — BofA, JPMorgan, and Morgan Stanley raised their price targets to an average of $2,113, representing a 13.4% gain from the price at the time.
  • Part of the gain was also a technical snapback from a sharp pullback the prior week, when broad sector selling pressure hit the stock — so some of this week’s gain was simply recovering lost ground.

📈 Lam Research (LRCX) rose ~20.9%

  • LRCX had the strongest move among our past picks, built on a steady drumbeat of analyst upgrades and a sector-wide semiconductor equipment rally.
  • The company raised its 2026 wafer fabrication equipment (WFE) market forecast.
  • On June 8th, shares jumped 8.44% as the broader Technology Equipment sector rallied 3.93%, with peers Micron and Marvell also posting double-digit gains the same day — this was a sector-wide AI chip equipment rally, not an LRCX-specific story.

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