AI storage opportunities are booming, with Wall Street analysts heavily bullish on Seagate Technology Holdings PLC (STX.US).

The memory and storage industry has become one of the biggest beneficiaries of the artificial intelligence spending wave. Wall Street analysts are saying that Seagate Technology Holdings PLC's (STX.US) current impressive performance and the strong momentum it is expected to continue are unprecedented. The stock price of this storage giant soared more than 17% in pre-market trading on Wednesday, following the company's announcement of third-quarter performance and guidance that far exceeded expectations. Western Digital Corporation (WDC.US), SanDisk (SNDK.US), Micron Technology, Inc. (MU.US), and other industry peers also saw their stock prices rise. Morgan Stanley raised its target price for Seagate Technology Holdings PLC from $582 to $767. Morgan Stanley analyst Eric Woodland wrote in a research report, "For the third consecutive quarter, our previously optimistic expectations are becoming the new benchmark for Seagate, as its pricing, gross margins, and profitability continue to far exceed our and the market's expectations." Woodland added that the company is benefiting from rapid growth in Token ( Token) and the rise of artificial intelligence applications, as hard disk drives account for about 80% of cloud storage demand. With Seagate and Western Digital Corporation forming a "rational" duopoly, and industry supply remaining tight, the company is running at full capacity. Woodland explained, "Before the first-quarter earnings report, we originally expected Seagate's gross margin to exceed 50% in the December 2026 quarter and earnings per quarter to reach $5. However, based on the company's earnings per share guidance for the June quarter given tonight, the gross margin for this quarter (June quarter) is expected to exceed 50%. The company's cost reduction compared to our estimates is in the low double-digit percentage, so it is clear that product price increases are the drive behind the unexpectedly wide expansion of gross margin." He also said, "With AI demand continuing to heat up and a favorable supply-demand situation, this price increase trend is sustainable. In fact, we expect price growth to accelerate in 2027. We now forecast Seagate to achieve a gross margin of over 60% in June 2027, previously predicted for December 2027. The key is that as incremental gross margins approach over 70%, there is every reason to believe that the company's gross margin and profit level have not yet reached a ceiling." Wedbush Securities reiterated its "outperform" rating for Seagate and raised its target price from $700 to $825. Wedbush Securities analyst Matt Bryson believes that the company's fundamentals continue to strengthen. The growth in revenue, gross margin, and the magnitude of the guidance exceed the 100-200 basis points of outperformance in the past few quarters. Bryson explained, "Given Seagate's significantly improved outlook in the near term, and the potential for larger price and profit growth in the coming quarters, we see no reason to change our constructive stance on the company." JPMorgan analyst Sameek Chatterjee stated that Seagate is likely to further benefit from the artificial intelligence investment boom, as its Mozaic 4 hard drives have been certified by two hyperscale data center operators. In addition, most shipments of heat-assisted magnetic recording (HAMR) hard drives are expected to be completed by the end of this year, with Mozaic hard drives set to hit the market in 2027. Chatterjee said, "We see a clear and predictable roadmap. With continuous iterations of storage areal density technology, enterprise storage capacity is expected to maintain an average annual growth rate of around 25%, providing solid support for the continued expansion of gross margins."