The Surge in Seagate Technology Stock Price Today
Technology

Seagate Surges on Morgan Stanley’s Upgrade and AI Revolution Boosts Data Storage Market

Seagate Technology (STX) stock is surging on Tuesday, with a 9% increase in share price as of 3 p.m. ET. This growth is attributed to a note published by Morgan Stanley this morning, in which the firm upgraded its rating on Seagate from equal weight to overweight. The analysts also raised their 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.

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.

The data storage industry is on an upswing and AI-related demand is growing, which could see substantial improvements in Seagate’s profitability. Keith Noonan has no position in any of the stocks mentioned, and The Motley Fool also has no position in any of the stocks mentioned and has a disclosure policy.

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