Western Digital and HP have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – January 6, 2026 – Zacks Equity Research shares Western Digital Corp. WDC, as the Bull of the Day and HP HPQ as the Bear of the Day. In addition, Zacks Equity Research provides analysis on — NVIDIA Corporation NVDA, D-Wave Quantum Inc. QBTS and Palantir Technologies Inc. PLTR.Here is a synopsis of all three stocks:Bull of the Day:Western Digital Corp., a Zacks Rank #1 (Strong Buy), has seen its shares surge over the past year as the company benefits from an accelerating transformation driven by artificial intelligence and explosive demand for storage solutions. The company is a leader in enterprise hard disk drives (HDDs) and nearline storage.The stock broke out to an all-time high in 2025 on increasing volume. Shares continue to display relative strength as buying pressure accumulates in this market leader.Western Digital is part of the Zacks Computer – Storage Devices industry group, which currently ranks in the top 7% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has over the past year.Take note of the favorable characteristics for this group below. Stocks in this industry are relatively undervalued based on traditional valuation metrics. They are also projected to experience above-average earnings growth, which signifies a powerful combination that should lead to higher prices in the future.Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.Company DescriptionWestern Digital manufactures and sells data storage devices and solutions based on HDD technology in the United States, Asia, Europe, the Middle East, and Africa. The company offers internal HDDs, data center drives and platforms, as well as external and portable drives.In a year where artificial intelligence reshaped the technology landscape, few companies captured the momentum quite like Western Digital. Innovations such as UltraSMR and heat-assisted magnetic recording have enabled the company to ship industry-leading 30TB+ drives tailored for AI data lakes. Strong free cash flow generation and a fortified balance sheet provide additional financial flexibility as the company capitalizes on multi-year hyperscaler buildouts.The storage specialist, a standout in the Zacks Computer – Storage Devices industry, witnessed its shares surge nearly 300% last year, significantly outperforming both the broader market and its peers. And the industry's tailwinds are just getting started. AI-powered storage markets are exploding—from $30.27 billion in 2025 to a projected $187.61 billion by 2035 at a 20% compounded annual growth rate. Data center operators and hyperscalers continue to expand infrastructure at an unprecedented pace, driving sustained demand for the company’s HDD solutions.Earnings Trends and Future EstimatesWhat stands out is Western Digital’s consistent ability to deliver positive earnings surprises; the storage provider has exceeded EPS estimates in each of the past 11 quarters. The company delivered a trailing four-quarter average surprise of over 9%, reflecting strong execution in converting AI-driven demand into results. This track record aligns perfectly with the power of the Zacks Rank system, which prioritizes stocks showing upward earnings revisions.Western Digital’s transformation has been remarkable. The company reported fiscal first-quarter results back in October that exceeded expectations, with adjusted EPS of $1.78 beating the Zacks Consensus Estimate by nearly 12%. Revenue of $2.8 billion topped forecasts by about 4%. Increasing sales in the cloud end market are being driven by solid demand for higher-capacity nearline products.The California-based company has been the beneficiary of improving earnings estimate revisions as of late. Looking into fiscal 2026, analysts have raised their annual EPS estimates by 0.39% in the past 60 days. The Zacks Consensus Estimate now stands at $7.66 per share, reflecting better than 55% growth relative to the prior year.Let’s Get TechnicalWestern Digital was the second-best performer in the S&P 500 last year. Only stocks that are in extremely powerful uptrends are able to make this type of price move and widely outperform the market. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.Notice how shares remain above upward-sloping 50-day (blue line) and 200-day (red line) moving averages. The momentum appears to be carrying over into 2026. With both strong fundamentals and technicals, Western Digital stock is poised to continue its outperformance.Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Western Digital has recently witnessed positive revisions. As long as this trend remains intact (and WDC continues to deliver earnings beats), the stock will likely continue its bullish run throughout this year.Bottom LineBacked by a leading industry group and robust history of earnings beats, it’s not difficult to see why this company is a compelling investment. Currently, WDC carries a Zacks Rank #1 (Strong Buy), driven by favorable estimate momentum.Solid institutional buying should continue to provide a tailwind for the stock price. Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix. If you haven’t already done so, be sure to put WDC on your watchlist.Bear of the Day:HP Inc. provides personal computing, printing, and other related technologies in the United States and internationally. Formerly known as Hewlett-Packard, the company changed its name in October 2015. It serves small- and medium-sized businesses, the public sector, and large enterprises.Key challenges remain for HP in 2026 including changes in customer purchasing behavior and industry component availability. A difficult macroeconomic environment and lingering inflationary conditions do not bode well for the company’s outlook.HP’s forecast for fiscal 2026 PC demand raises concerns regarding its growth prospects in the short-term. Management expects PC unit volumes to fall in the current year. Lower volumes and price pressures would make it harder to protect margins and meet earnings targets.The computing giant faces stiff competition for its PC and printer businesses. The PC segment competes with the likes of Apple, Dell, Lenovo, and Acer. In the latest quarter, print revenues fell 4% year-over-year as office demand in North America and Europe remained soft. The print segment will likely continue to face structural challenges as customers reduce printing volumes and shift to digital workflows.The Zacks RundownA Zacks Rank #5 (Strong Sell) stock, HP is a component of the Zacks Computer – Micro Computers industry group, which currently ranks in the bottom 14% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months.Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.HPQ shares have been underperforming the market over the past year. The stock is trading near a 52-week low even as the major U.S. indexes hover near all-time highs.Recent Earnings Misses & Deteriorating OutlookHP has fallen short of earnings estimates in four of the past six quarters. The technology company posted a trailing four-quarter average earnings miss of -2.6%. Consistently falling short of earnings estimates is a recipe for underperformance, and HP is no exception.The company has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current fiscal year, analysts have slashed estimates by -9.64% in the past 60 days. The FY2026 Zacks Consensus EPS Estimate is now $3.00 per share, reflecting negative growth of -3.9% relative to the prior year.Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.Technical OutlookAs illustrated below, HPQ stock is in a sustained downtrend. Notice how the stock has shown little in the way of a trend, widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day (red line) moving averages – another good sign for the bears.HPQ stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 30% in the past year alone.Final ThoughtsA deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that HPQ stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of HP until the situation shows major signs of improvement.Additional content:1 AI & 1 Quantum Stock Beat NVIDIA in 2025, Promise More Gains AheadDespite U.S.-China trade headwinds, Wall Street’s most sought-after stock, NVIDIA Corporation, reported strong quarterly results throughout 2025, fueled by the artificial intelligence (AI) boom. Demand for its cutting-edge Blackwell chips and the CUDA software platform remained strong, helping NVDA stock surge 38.8% last year.Interestingly, two stocks — one riding the AI growth wave and another the quantum computing trend — outperformed NVIDIA in 2025 and are now showing greater momentum this year as well. They are D-Wave Quantum Inc. and Palantir Technologies Inc., whose shares soared 181.2% and 135%, respectively, last year.Let us now examine the factors behind their strong performance and why their rally may not be over yet –D-Wave’s Advantage2 Drives Strong Revenue GrowthD-Wave’s revenues came in at $3.7 million in the fiscal third quarter of 2025, nearly doubling year over year and up 20.8% sequentially, as cited on ir.dwavequantum.com. D-Wave’s revenues for the first nine months of last year were $21.8 million, an increase of 235% from the same period a year ago.Revenues improved as D-Wave rolled out its coveted Advantage2 platform to manage complex workloads and expanded its customer base, including Forbes Global 2000 companies. What’s more, D-Wave reported bookings of $2.4 million in the fiscal third quarter of 2025, up 3% year over year and 80% quarter over quarter. This means orders from customers have been received and will translate into future net revenues.As a result, D-Wave is expected to achieve robust earnings growth of 73.3% this year, driven by the Advantage2 system’s real-world applications, which are expected to expand bookings and reduce future losses.Brokers are also optimistic about the company’s prospects. They predict QBTS stock’s average short-term price target at $38.71, indicating a 47.5% increase from the last closing price of $26.25. The highest target stands at $48, suggesting a potential upside of 82.9%.Palantir Surges on Growing AI Platform DemandPalantir’s shares not only gained well in 2025 but are also poised for further growth due to the increasing adoption of its Artificial Intelligence Platform (AIP), which is in demand among both U.S. commercial and government clients.According to investors.palantir.com, the company’s third-quarter revenues came in at $1.18 billion, up 63% year over year and 18% sequentially, with growth in both commercial and government segments. Palantir further expects full-year 2025 sales to be at $4.396 billion to $4.400 billion, along with a positive GAAP net income.Palantir’s expanding commercial client base should propel future growth, while steady government contracts would create barriers to entry. Thus, the company’s expected earnings growth rate for the current year is a superb 78.1%.Brokers are somewhat positive about Palantir’s prospects, increasing the average short-term price target for PLTR to $192.67 (up 6.5%) from $180.84. The highest target is $255, indicating a potential 41% upside.Palantir currently has a Zacks Rank #1 (Strong Buy), while D-Wave has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.Free: Instant Access to Zacks' Market-Crushing StrategiesSince 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.Get all the details here >>Media ContactZacks Investment Research800-767-3771 ext. 9339https://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Just Released: Zacks Top 10 Stocks for 2026Hurry – you can still get in early on our 10 top tickers for 2026. 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