Key Takeaways
- Seagate (STX) reached a record high of $460, climbing 8.34% on Monday and gaining 56% year-to-date in 2026.
- Morgan Stanley elevated its STX price target to $582 from $468 while maintaining its Overweight rating.
- The firm replaced Western Digital (WDC) with Seagate as its preferred HDD sector investment.
- Supply-demand equilibrium in the hard drive market is now projected for 2029, delayed by one year.
- Cantor Fitzgerald simultaneously boosted its STX target to $650 from $500, keeping its Overweight stance.
Seagate Technology experienced a remarkable trading session on Monday, with shares surging to an unprecedented $460 milestone. This historic achievement followed Morgan Stanley’s decision to reorganize its hard-disk drive sector preferences, elevating Seagate to the top position while downgrading Western Digital’s status.
Seagate Technology Holdings plc, STX
Morgan Stanley’s Erik Woodring maintained Overweight recommendations for both STX and WDC, but significantly increased Seagate’s price objective to $582 from $468. Western Digital’s target received a more modest adjustment to $380 from $369. In premarket activity, both companies saw gains, with STX advancing 4.6% to $449 and WDC rising 3.2% to $304.38.
The investment bank’s rationale centers on sustained HDD demand. Cloud computing workloads continue expanding, while artificial intelligence applications generate exponentially more data requiring storage solutions. Hard disk drives currently manage approximately 80% of global cloud data storage infrastructure.
While solid-state storage is gradually capturing market share from traditional hard drives, the transition remains gradual. Woodring emphasized that emerging agentic AI technologies and increasingly complex workloads are generating unprecedented data volumes, maintaining robust HDD demand.
The firm now anticipates market equilibrium between HDD supply and demand will arrive in 2029—a year beyond its prior projection. With limited major manufacturers in the space, this extended timeline benefits both Seagate and Western Digital.
What Pushed Seagate Past Western Digital
The leadership change stemmed from multiple considerations. Various catalysts Morgan Stanley had previously identified for Western Digital—including divesting its remaining Sandisk holdings and closing the valuation differential with Seagate—have already materialized.
Looking ahead, Woodring anticipates Seagate’s gross profit margins will outpace Western Digital’s by approximately 50 basis points annually. This advantage derives from Seagate’s accelerated deployment of higher-capacity drive models, which generate superior margins.
Woodring expressed strong confidence in the sector, stating: “Our conviction on the HDD space remains higher than any end-market we cover.”
Morgan Stanley wasn’t alone in its optimism. Cantor Fitzgerald simultaneously elevated its Seagate price objective to $650 from $500 while preserving its Overweight rating. This adjustment followed Western Digital’s Innovation Day presentation, where the company showcased technological breakthroughs and revised financial projections.
Robust Financial Results Support Bullish Outlook
The analyst upgrades reflected solid fundamental performance. Seagate delivered impressive fiscal Q2 2026 results—earnings per share of $3.11 exceeded the $2.79 consensus estimate, while revenue of $2.83 billion surpassed projections by approximately 3.66%.
Such outperformance provides justification for upward analyst revisions. The stock has delivered a remarkable 556.69% return over the past year, with the company’s market capitalization now standing at $96.2 billion.
InvestingPro identified STX as trading above its Fair Value assessment, including it on the platform’s Most Overvalued securities list.
