Steve Grasso on whether it’s still worth buying Western Digital after this year’s big gains

Contessa Brewer (Anchor) 00:00.040

This is the second-to-last trading day of 2025. Let's take a look at some of the top performers in the S&P this year. Western Digital is up nearly 300%. Look at that. And you've got Palantir up 141%, Goldman Sachs and Caterpillar up more than 50% each. Are these the names to own

Contessa Brewer (Anchor) 00:17.920

heading into the new year or will those gains just fizzle out? Let's ask our trader joining us now for more. Steve Grasso, CEO of Grasso Global and a CNBC contributor. Steve, uh the mystery chart here, Western turn digital. Is there still time to get in when you've already seen

Contessa Brewer (Anchor) 00:34.000

gains of this magnitude?

Steve Grasso (CEO) 00:35.800

Yeah, when Can Tessa, thanks for having me. When you look at the gains that you've seen, I mean, that is eye popping, jaw dropping gains. They spun out their flash business. It makes them a hard disk player that's really in the in the focus or target uh for for the hyperscaler.

Steve Grasso (CEO) 00:54.800

So, hyperscaler CapEx money has to go someplace. The Western Dig has benefited from that. But if you look at the multiple, the multiple's trading at 25 times trailing. Usually, historically, that should be in the mid-teens. So, if you have some reservations about valuation, I I

Steve Grasso (CEO) 01:12.920

think that's warranted, but this whole space has been tripping over itself. I'm going to say wait. Let's wait a couple of weeks. See if it digests. Comes in a bit, and maybe you get yourself a bargain, but I I I still think it's in a sweet spot.

Contessa Brewer (Anchor) 01:28.120

All right, Palantir, which is up I said about 50%. Um, is there still room to grow here? And And I know you're really focused on what the government is doing to keep Palantir on this upward trajectory, where else could it find some momentum?

Steve Grasso (CEO) 01:46.080

Yeah, it's a great question. If you look at it between 45 and 55% of the revenue has come from,

Steve Grasso (CEO) 01:52.000

you know, I I would let this one breathe too. The only one I wouldn't let breathe so far is Palantir. Okay.

Contessa Brewer (Anchor) 01:58.360

Uh, and finally we have Caterpillar Boy, the it was a huge story line when they talked about on their earnings call. The opportunity and getting their equipment out there and building these 10, 20, 30 billion dollar data centers, can Caterpillar keep digging at it?

Steve Grasso (CEO) 02:16.480

Yeah, well well think about it. You You asked the magical question. Is there going to be this AI data center frenzy going into 2026 is it and or perpetuity because that's the reason why Caterpillar is beating that's the reason why people have chased caterpillar. People Investors

Steve Grasso (CEO) 02:33.360

ordinarily don't chase caterpillar. It's reliant basically to the tune of 50% of revenues on AI data sets. So if that continues, you're in great shape. And there is some deregulation angle there. There is infrastructure spend there. Their margins have been increasing. But when

Steve Grasso (CEO) 02:53.120

you look at the other stocks you mentioned, Western Digital has margins around 50%. Palantir has margins around 90%. This is one that I would pump the brakes on as well and see how it all flushes out first 2 weeks, 3 weeks of the new year.