Morgan Stanley Raises Seagate Price Target to $767 Amid Strong Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy STX?
Source: stocktwits
- Price Target Increase: Morgan Stanley raised its price target for Seagate (STX) from $582 to $767 while maintaining an ‘Overweight’ rating, indicating significant future growth potential amid strong demand for storage chips.
- Strong Demand: A Citi analyst noted that Seagate's demand continues to exceed expectations, contributing to a premarket share price increase of over 17% on Wednesday, reflecting market optimism following the upbeat quarterly report.
- Technological Advancements: Mizuho raised STX's price target to $700, highlighting the scaling of Mosaic3 technology with major cloud providers, with expectations that Mosaic4 will account for over 50% of HAMR shipments by the end of 2026, further solidifying market position.
- Optimistic Financial Outlook: Seagate forecasts fourth-quarter revenue at a midpoint of $3.45 billion, surpassing analyst estimates of $3.16 billion, showcasing strong performance in revenue and profitability that is likely to drive further stock price increases.
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Analyst Views on STX
Wall Street analysts forecast STX stock price to fall
18 Analyst Rating
14 Buy
3 Hold
1 Sell
Moderate Buy
Current: 673.640
Low
150.00
Averages
310.39
High
465.00
Current: 673.640
Low
150.00
Averages
310.39
High
465.00
About STX
Seagate Technology Holdings plc provides mass-data storage infrastructure solution. The Company’s principal products are hard disk drives, commonly referred to as disk drives, hard drives (HDDs). In addition to HDDs, the Company produces a range of data storage products, including solid state drives (SSDs), solid state hybrid drives, storage subsystems, as well as a scalable edge-to-cloud mass data platform. Its HDD products are designed for mass capacity storage and legacy markets. Mass capacity storage involves use cases, such as hyperscale data centers and public clouds, as well as emerging use cases. The Company’s HDD and SSD product portfolio includes Serial Advanced Technology Attachment, Serial Attached SCSI and Non-Volatile Memory Express based designs to support a variety of mass capacity and legacy applications. Its systems portfolio includes storage subsystems for enterprises, cloud service providers, scale-out storage servers and original equipment manufacturers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Seagate Technology Reports Strong Earnings, Shares Surge
- Revenue Surge: Seagate Technology reported a 44% year-over-year revenue increase to $3.1 billion for its fiscal third quarter ending April 3, highlighting the urgent demand for data storage solutions driven by AI infrastructure expansion, which significantly boosts the company's performance.
- Margin Improvement: The adjusted gross margin improved by over 10 percentage points to 47%, while the operating margin jumped 14 percentage points to 37.5%, indicating that the company successfully raised prices in a high-demand environment, thereby enhancing profitability.
- Net Income Soars: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, reflecting the company's strong financial performance in a rapidly growing market and further solidifying its market leadership.
- Optimistic Outlook: Seagate expects revenue of approximately $3.45 billion and adjusted earnings per share of $5.00 for the upcoming fiscal quarter, both exceeding Wall Street estimates, with the CEO stating that the company is entering a new era of structural growth as AI applications continue to drive sustained storage demand.
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U.S. Stocks Close: S&P 500 Hits All-Time High
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- Atlassian Stock Surge: Atlassian's stock soared over 29% after reporting Q3 revenue of $1.79 billion, exceeding the market expectation of $1.69 billion, highlighting a robust recovery in the software sector that may attract more investor interest.
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- nVent Electric's Strong Earnings: nVent's stock jumped 11% as first-quarter EPS and revenue surpassed Wall Street's highest estimates, with full-year revenue growth forecasted at 26% to 28%, significantly above the consensus of 18%, reflecting robust demand in data centers and energy storage.
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Memory Chip Shortage Drives Rising Capital Expenditures
- Surging Memory Demand: Samsung's EVP Jaejune Kim stated that the surge in memory demand is prompting customers to pre-order chips for 2027, indicating that the supply-demand gap is expected to widen further, highlighting an increasingly tight market in the coming years.
- Rising Capital Expenditures: Alphabet reported a capital expenditure of $35.7 billion in Q1, primarily aimed at supporting AI opportunities, reflecting the urgency of investing in technical infrastructure, with projections indicating capex could exceed $1 trillion by next year.
- Growing Hardware Demand: Meta Platforms is extending the lifespan of aging servers due to an inability to acquire new ones, with an internal memo noting that hardware demand growth has exceeded expectations, particularly in critical server commodities like DRAM and HDDs, which are becoming binding constraints.
- Emerging Investment Opportunities: With strong earnings from major tech firms, Wall Street analysts believe investors will continue to chase perceived winners in the semiconductor and memory sectors, especially against the backdrop of rising prices for DRAM and NAND products, while demand for memory testing equipment is also on the rise.
See More
Sandisk Reports Tripled Revenue in Q3 Earnings
- Significant Revenue Growth: Sandisk's Q3 fiscal 2026 revenue surged over 300% year-over-year to $5.95 billion, significantly exceeding analyst expectations of $4.73 billion, highlighting the company's robust performance in the storage market.
- Profitability Turnaround: The company reported a non-GAAP profit of nearly $3.68 billion ($23.41 per share), a remarkable recovery from a loss of $43 million in the previous year, indicating a substantial improvement in profitability.
- Strong Segment Performance: Revenue from the data center segment skyrocketed 645% year-over-year to nearly $1.47 billion, while edge computing contributed $3.66 billion with a 295% increase, and consumer revenue grew 44% to $820 million, showcasing strong demand across all segments.
- Optimistic Guidance: Sandisk provided a revenue outlook for the current fourth quarter of $7.75 billion to $8.25 billion, with adjusted net income expectations of $30 to $33 per share, both well above market averages, reflecting the company's confidence in future growth.
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- Roku's Robust Growth: Roku's first-quarter revenue reached $1.25 billion, exceeding the expected $1.20 billion, with adjusted EBITDA of $148.4 million also above the forecast of $131.3 million, highlighting the company's ongoing growth potential in the streaming market.
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Seagate Technology Reports Strong Earnings, Shares Surge
- Revenue Surge: Seagate Technology reported a 44% year-over-year revenue increase to $3.1 billion for its fiscal third quarter ending April 3, highlighting the urgent demand for data storage solutions driven by AI infrastructure expansion, which significantly boosts the company's performance.
- Margin Improvement: The adjusted gross margin improved by over 10 percentage points to 47%, while the operating margin jumped 14 percentage points to 37.5%, indicating that the company successfully raised prices in a high-demand environment, thereby enhancing profitability.
- Net Income Soars: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, reflecting the company's strong financial performance in a rapidly growing market and further solidifying its market leadership.
- Optimistic Outlook: Seagate expects revenue of approximately $3.45 billion and adjusted earnings per share of $5.00 for the upcoming fiscal quarter, both exceeding Wall Street estimates, with the CEO stating that the company is entering a new era of structural growth as AI applications continue to drive sustained storage demand.
See More
U.S. Stocks Close: S&P 500 Hits All-Time High
- S&P 500 Strong Performance: The S&P 500 index rose by 0.29%, reaching an all-time high, driven by Apple's forecast of stronger-than-expected Q2 revenue, which boosted market sentiment and indicated increased investor confidence in tech stocks.
- Atlassian Stock Surge: Atlassian's stock soared over 29% after reporting Q3 revenue of $1.79 billion, exceeding the market expectation of $1.69 billion, highlighting a robust recovery in the software sector that may attract more investor interest.
- Oil Price Volatility Impacting Markets: WTI crude oil prices fell more than 3%, easing inflation concerns, although trade tensions resurfaced with President Trump's threat to raise tariffs on EU auto imports, potentially negatively affecting market sentiment.
- Economic Data Influencing Stocks: The April ISM manufacturing index remained unchanged at 52.7, below the expected 53.2, indicating signs of economic slowdown, despite the majority of companies reporting Q1 earnings that exceeded expectations, leaving the overall market facing uncertainty.
See More
Atlassian and Others See Significant Stock Gains
- Atlassian's Optimistic Guidance: Atlassian shares surged 23% after projecting a 24% revenue growth for the year, exceeding its previous 22% forecast and the FactSet consensus of 22.2%, indicating strong market performance and growth potential.
- nVent Electric's Strong Earnings: nVent's stock jumped 11% as first-quarter EPS and revenue surpassed Wall Street's highest estimates, with full-year revenue growth forecasted at 26% to 28%, significantly above the consensus of 18%, reflecting robust demand in data centers and energy storage.
- Cboe Global Markets Layoffs: Cboe shares rose 9% following the announcement of a 20% workforce reduction, with first-quarter adjusted EPS at $3.70 and revenue of $728.9 million, both exceeding market expectations, demonstrating the company's commitment to operational optimization.
- Roku's Revenue Beat: Roku's stock increased by 4% after reporting first-quarter revenue of $1.25 billion, surpassing the expected $1.20 billion, with adjusted EBITDA also exceeding estimates, showcasing the company's ongoing growth potential in the streaming market.
See More
Memory Chip Shortage Drives Rising Capital Expenditures
- Surging Memory Demand: Samsung's EVP Jaejune Kim stated that the surge in memory demand is prompting customers to pre-order chips for 2027, indicating that the supply-demand gap is expected to widen further, highlighting an increasingly tight market in the coming years.
- Rising Capital Expenditures: Alphabet reported a capital expenditure of $35.7 billion in Q1, primarily aimed at supporting AI opportunities, reflecting the urgency of investing in technical infrastructure, with projections indicating capex could exceed $1 trillion by next year.
- Growing Hardware Demand: Meta Platforms is extending the lifespan of aging servers due to an inability to acquire new ones, with an internal memo noting that hardware demand growth has exceeded expectations, particularly in critical server commodities like DRAM and HDDs, which are becoming binding constraints.
- Emerging Investment Opportunities: With strong earnings from major tech firms, Wall Street analysts believe investors will continue to chase perceived winners in the semiconductor and memory sectors, especially against the backdrop of rising prices for DRAM and NAND products, while demand for memory testing equipment is also on the rise.
See More
Sandisk Reports Tripled Revenue in Q3 Earnings
- Significant Revenue Growth: Sandisk's Q3 fiscal 2026 revenue surged over 300% year-over-year to $5.95 billion, significantly exceeding analyst expectations of $4.73 billion, highlighting the company's robust performance in the storage market.
- Profitability Turnaround: The company reported a non-GAAP profit of nearly $3.68 billion ($23.41 per share), a remarkable recovery from a loss of $43 million in the previous year, indicating a substantial improvement in profitability.
- Strong Segment Performance: Revenue from the data center segment skyrocketed 645% year-over-year to nearly $1.47 billion, while edge computing contributed $3.66 billion with a 295% increase, and consumer revenue grew 44% to $820 million, showcasing strong demand across all segments.
- Optimistic Guidance: Sandisk provided a revenue outlook for the current fourth quarter of $7.75 billion to $8.25 billion, with adjusted net income expectations of $30 to $33 per share, both well above market averages, reflecting the company's confidence in future growth.
See More
Apple, Roku, Estée Lauder Beat Earnings Expectations
- Apple's Strong Earnings: Apple reported a fiscal second-quarter earnings of $2.01 per share and revenue of $111.18 billion, surpassing analyst expectations of $1.95 and $109.66 billion, although iPhone sales missed estimates for the third consecutive quarter, indicating increasing market competition pressures.
- Roku's Robust Growth: Roku's first-quarter revenue reached $1.25 billion, exceeding the expected $1.20 billion, with adjusted EBITDA of $148.4 million also above the forecast of $131.3 million, highlighting the company's ongoing growth potential in the streaming market.
- Estée Lauder's Better-Than-Expected Performance: Estée Lauder reported third-quarter earnings of $0.91 per share and revenue of $3.71 billion, both exceeding analyst estimates, despite announcing job cuts as part of its turnaround strategy, reflecting its adaptive measures in a changing market.
- Moderna's Improved Financials: Moderna posted a first-quarter loss of $3.40 per share, better than the anticipated loss of $4.45, with revenues of $389 million surpassing the $236.4 million estimate, indicating its sustained competitiveness in the vaccine market.
See More
