AI storage logic strengthened Seagate (STX.US) up target price on Wall Street.

Storage device giant Seagate Technology Holdings PLC (STX.US) saw its stock price surge nearly 17% on Wednesday, driven by the company's latest quarterly results significantly surpassing market expectations. The company also provided earnings and revenue guidance for the next fiscal quarter that was well above Wall Street forecasts. For the third quarter of fiscal year 2026, Seagate expects adjusted earnings per share to be between $3.2 and $3.6, with the midpoint at $3.4, significantly higher than the analysts' average forecast of $2.99. The company also anticipates quarterly revenue to be between $2.8 billion and $3 billion, exceeding the market's expected $2.79 billion. In the latest quarter ending January 2, Seagate reported adjusted earnings per share of $3.11, with revenue increasing by 22% year-on-year to $2.83 billion, surpassing the market's expectations of $2.83 per share and $2.75 billion in revenue. This highlights the company's profitability improvement in the backdrop of increased demand for high-capacity nearline hard drives and product structure enhancements. Following the release of the financial report, several Wall Street institutions swiftly raised their target prices and reiterated their bullish views. Wedbush analyst Matt Bryson maintained an "outperform" rating on Seagate and raised the target price from $380 to $430, expressing optimism about the company's prospects as revenue and profit margins continue to improve. Bryson emphasized that Seagate disclosed its HAMR (Heat-Assisted Magnetic Recording) technology has been certified in all U.S. customers, easing concerns about the company's execution on the new generation of high-capacity platforms. He believes this achievement lays the foundation for Seagate to ramp up HAMR production capacity steadily and enhances the certainty of its Mozaic 4 platform scaling up. As shipment volumes expand in the second half of 2026, improvements in the high-end product portfolio may drive further increases in prices and profit margins. Amit Daryanani, an analyst at Evercore ISI, similarly raised Seagate's target price significantly from $330 to $450, noting the company's position in the AI-driven long-term structural growth trend. With a favorable industry supply-demand situation, a product mix leaning towards higher-capacity nearline hard drives is strengthening pricing power. Additionally, Seagate's leading edge in HAMR technology further cements its competitive position. Furthermore, Morgan Stanley raised Seagate's target price from $372 to $468, while TD Cowen increased its target price from $340 to a substantial $500, reflecting institutional optimism about the explosive growth in data storage demand in the AI era.