Seagate Technology Upgraded to Overweight at Morgan Stanley: Will Data Storage and AI Drive Demand?

The Surge in Seagate Technology Stock Price Today

Morgan Stanley has upgraded Seagate Technology (STX) stock from equal weight to overweight, with a 9% increase in share price as of 3 p.m. ET on Tuesday. The growth is attributed to a note published by the firm this morning, which raised its one-year price target on Seagate stock from $73 per share to $115 per share.

Despite a 56% increase in the last year, Seagate stock is still down about 17% from its high. However, Morgan Stanley’s coverage suggests that they believe the storage hardware specialist will reach a new peak valuation in the near future. The firm predicts that Seagate will benefit from the recovery in the data storage market and its position in HAMR technologies, which will lead to stronger sales and earnings performance. Furthermore, they anticipate that demand related to the rise of generative AI will be a significant performance driver.

Seagate’s profitability could see substantial improvements with the data storage industry on an upswing and AI-related demand growing. Morgan Stanley’s analysts believe that Seagate’s earnings performance in the near term could exceed expectations by 25% to 30%. Additionally, the connection to the AI revolution may result in investors assigning higher valuation multiples to Seagate and other data storage stocks.

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