Weekly Winners | Western Digital Soars 15%; Broadcom Surges 13%; Micron and Alphabet Jump 10%

This week, which stocks lagged or dragged? Weekly Winners column keeps up with market trends, helping Tigers sort out the week's hottest sectors, stock winners and important news.

Below are top 10 S&P 500 stock gainers for the week ended September 5:

Western Digital Surges as Morgan Stanley Elevates Stock to Top Pick

Western Digital shares surged 14.6% this week as Morgan Stanley elevated the stock to its Top Pick, citing confidence in the company’s technology roadmap and capital return plans.

“Following management meetings, we gained increased confidence in WDC’s tech roadmap, and walk away more confident that WDC’s 20%+ valuation discount vs. peers is unwarranted,” Morgan Stanley analysts wrote.

The bank lifted its price target to $99 from $92.

Broadcom Stock Jumps on New $10 Billion Customer That Analysts Say Is OpenAI

Broadcom shares soared 12.6% this week as the chipmaker said on its earnings call that it had secured a new $10 billion customer. Analysts quickly pointed to OpenAI.

Following a better-than-expected earnings report late Thursday, Broadcom CEO Hock Tan told analysts that a fourth large customer had put in orders for $10 billion in custom artificial intelligence chips, which the company calls XPUs.

“One of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs,” Tan said. He added that the order increased Broadcom’s forecast for AI revenue next year, when shipments will begin.

Morgan Stanley Sees “Modest September Quarter Upside” for Seagate

Morgan Stanley sees “modest September quarter upside” for both Western Digital and Seagate Technology. The firm continues to view hard disk drives as an attractive end market as demand outstrips limited supply against the backdrop of “overall rational oligopolistic behavior,” or a small number of major players controlling the lion’s share of the market.

The firm rates Seagate at Overweight with a $168 price target.

Seagate shares jumped 12.4% this week.

‘Load Up,’ Says Top Analyst on Micron Stock

Micron Technology stock jumped 10.4% this week.

In a new note, CLSA analyst Sanjeev Rana has initiated coverage on Micron with an Outperform rating and a price target of $155, implying 18% upside from current levels.

Rana sees Micron as a key beneficiary of rising AI spending, pointing to strong demand for high-bandwidth memory (HBM), steady pricing in DRAM, and signs of recovery in NAND.

Alphabet Shares Surge After Dodging Antitrust Breakup Bullet

Alphabet shares surged 10% this week as a U.S. judge ruled against breaking up the Google parent, clearing a major regulatory overhang and adding about $210 billion to the company's market value.

The ruling on Tuesday by Judge Amit Mehta allows Google to retain control of its Chrome browser and Android mobile operating system, while barring certain exclusive contracts with device makers and browser developers.

The U.S. government sued Google in 2020, alleging it illegally maintained a monopoly in search through exclusionary deals with device makers and browser developers.

Builders FirstSource Stock and D.R. Horton Jump. Thank the Downbeat Jobs Report

Shares of home builders and suppliers jumped this week following a lackluster U.S. jobs report for August that sent bond yields lower and raised expectations for rate cuts by the Federal Reserve. Builders FirstSource jumped 7.6%, and D.R. Horton gained 7.3%.

The U.S. added 22,000 jobs in August, well below the 76,500 economists had expected, and the unemployment rate ticked up to 4.3% from 4.2% in July.

In turn, Wall Street’s bets on a rate cut in September rose to 100% from 96.4%, and the share of a half-point cut rose to 14.3% from zero, according to CME FedWatch. Traders now see a 64.4% chance of three quarter-point cuts before the end of the year, up from 45.8%.