Key Highlights
- Seagate (STX) reached an unprecedented peak of $460, gaining 8.34% on Monday and climbing 56% year-to-date in 2026.
- Morgan Stanley elevated its STX price objective to $582 from $468, maintaining its Overweight recommendation.
- The storage giant displaced Western Digital (WDC) as Morgan Stanley’s preferred choice in the hard disk drive sector.
- Analysts now project HDD market equilibrium to arrive in 2029, postponed from their earlier 2028 forecast.
- Cantor Fitzgerald separately boosted its STX target to $650 from $500, keeping its Overweight stance.
Seagate Technology shares surged to unprecedented territory on Monday, touching $460 for the first time in the company’s history. The rally followed Morgan Stanley’s decision to restructure its hard-disk drive sector preferences, elevating Seagate to the top position while demoting Western Digital.
Seagate Technology Holdings plc, STX
Morgan Stanley’s Erik Woodring maintained Overweight recommendations for both STX and WDC while significantly increasing Seagate’s price objective to $582 from its previous $468 mark. Western Digital’s target received a modest bump to $380 from $369. During premarket hours, both equities showed strength, with STX advancing 4.6% to $449 and WDC climbing 3.2% to $304.38.
The investment firm’s rationale centers on sustained HDD demand. Cloud computing continues its relentless expansion, while artificial intelligence applications generate massive volumes of data requiring storage infrastructure. Hard disk drives currently manage approximately 80% of global cloud storage capacity.
While flash memory technology gradually erodes HDD market dominance, the shift remains measured. Woodring emphasized that emerging agentic AI systems and sophisticated computational workloads are producing unprecedented data volumes, sustaining robust HDD requirements.
Morgan Stanley revised its timeline for HDD market equilibrium to 2029 — extending the forecast by twelve months. With limited major competitors in this concentrated industry, the projection benefits both Seagate and Western Digital.
What Pushed Seagate Past Western Digital
The leadership change reflected multiple considerations. Various catalysts 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 expand approximately 50 basis points quicker than Western Digital’s through the coming year. This advantage stems from Seagate’s accelerated deployment of high-capacity drive units, which command superior margins.
Woodring expressed strong confidence in the sector: “Our conviction on the HDD space remains higher than any end-market we cover.”
Morgan Stanley wasn’t alone in its optimism. Cantor Fitzgerald independently increased its Seagate price target — jumping to $650 from $500 — while retaining its Overweight rating. This adjustment followed Western Digital’s Innovation Day presentation, which showcased technological developments and revised financial projections.
Solid Financial Results Support Analyst Optimism
The analyst revisions weren’t arbitrary. Seagate delivered impressive fiscal Q2 2026 results — reporting earnings per share of $3.11 versus consensus expectations of $2.79, while revenue reached $2.83 billion, exceeding forecasts by roughly 3.66%.
Such performance gives Wall Street analysts justification for upward revisions. The stock has skyrocketed 556.69% over the past twelve months, pushing market capitalization to $96.2 billion.
InvestingPro identified STX as trading above its Fair Value calculation, placing the stock on its Most Overvalued roster.
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