Morgan Stanley Upgrades Seagate Technology Stock to ‘Overweight’ and Predicts Stronger Sales, Earnings Performance due to AI Demand

The Surge in Seagate Technology Stock Price Today

In a recent surge, Seagate Technology (STX) stock prices have increased by 9% as of 3 p.m. ET on Tuesday. This growth is attributed to a report published by Morgan Stanley this morning, which upgraded its rating on Seagate from equal weight to overweight and raised its one-year price target from $73 per share to $115 per share.

Despite an increase of 56% in the past year, Seagate’s stock price is still down about 17% from its high. However, Morgan Stanley’s coverage suggests that they believe the storage hardware specialist will reach new peak valuations 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, leading to stronger sales and earnings performance. Additionally, they anticipate that demand related to generative AI will be a significant performance driver.

The data storage industry is currently experiencing an upswing, and AI-related demand is also growing. With these factors at play, Seagate’s profitability could see substantial improvements in the near term. Morgan Stanley’s analysts believe that Seagate’s earnings performance could exceed expectations by 25% to 30%. Furthermore, they anticipate that investors may assign higher valuation multiples to Seagate and other data storage stocks due to their connection with the AI revolution.

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