Seagate Technology Holdings PLC (NASDAQ: STX) surged around 7% on Monday to a record high, fueled by rising demand for hard disk drives amid the generative AI infrastructure boom. The rally followed Morgan Stanley’s price target upgrade, underscoring Seagate’s advantage in meeting escalating storage needs and its outperformance against rivals and the broader market.
Bullish Price Target
Morgan Stanley has raised Seagate’s price target from $468.00 to $582.00, while maintaining an Overweight rating. The company replaced Western Digital as the research firm’s top pick. Last week, JPMorgan initiated coverage on Seagate, with an Overweight rating and a price target of $525. STX has been one of the top-performing stocks, growing more than sixfold in the past year alone.
On Monday, the stock closed at $453.30, which is close to its all‑time highs, with the intraday peak reaching $470.23 — the highest value since its Nasdaq listing in 2002. The upbeat investor sentiment reflects Seagate’s positioning as a key AI infrastructure play – its high-capacity enterprise hard drives are used for high-volume data storage by hyperscalers. The recent rally shows that the market no longer views Seagate as a legacy hardware firm, but as an important infrastructure play of the AI era.
Demand Boom
The company is well positioned to continue benefiting from the record-high storage demand and constrained supply. Large tech players like Amazon, Google, and Microsoft are competing with each other to train next-generation AI models that require significantly bigger storage space than initially estimated.
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Seagate has a solid track record of consistent dividend distributions, with decent payouts that make it an attractive bet for income investors. While the stock rally has been impressive, such sharp gains often invite near-term corrections. Technical indicators suggest STX may already be in overbought territory, giving investors reason to remain cautious. Among peers, Western Digital traded up 3.7% Monday afternoon, while SanDisk gained 3.5% and moved closer to last month’s peak.
“We continue to operate in an exceptionally strong demand environment, particularly within the data center end markets. In the December quarter, we saw sustained demand growth for our high-capacity nearline drives across global cloud data centers as well as continued improvement from the enterprise edge. Based on our build-to-order pipeline, we anticipate these positive demand trends will continue for some time,” said Seagate’s CEO Dave Mosley during his interaction with analysts after reporting Q2 2026 results.
Key Metrics
For the second quarter of fiscal 2026, Seagate reported adjusted earnings of $3.11 per share, sharply higher than the $2.03 per share posted in the year-ago quarter. The bottom line benefited from a 22% growth in revenues to $2.83 billion. On an unadjusted basis, Q2 earnings were $2.60 per share, compared to $1.55 per share a year earlier. Both revenue and earnings beat estimates, continuing the recent trend of consecutive outperformance.
Seagate shares have gained an impressive 65% since the beginning of 2026, though it experienced high fluctuation during that period. The average price for the last 52 weeks is $234.23.
The post Seagate hits all-time high as AI data hunger outpaces supply first appeared on Alphastreet.
