US Stock Market Move | Storage concept stocks collectively surged, Seagate Technology Holdings PLC (STX.US) surged more than 19%.

On Wednesday, storage concept stocks collectively surged, with Seagate Technology Holdings PLC (STX.US) rising by over 19%, Western Digital Corporation (WDC.US) by over 12%, SanDisk (SNDK.US) by over 9%, and Micron Technology, Inc. (MU.US) by over 4%. On the news front, the memory and storage industry has become one of the biggest beneficiaries of the wave of artificial intelligence spending. The third-quarter performance and guidance announced by Seagate Technology Holdings PLC far exceeded expectations. Morgan Stanley raised Seagate Technology Holdings PLC's target price from $582 to $767. Analyst Eric Woodlin wrote in the report, "For the third consecutive quarter, our previously optimistic expectations are becoming our new baseline expectations for Seagate, as its pricing, gross margin, and profitability continue to significantly exceed our and the market's expectations." Woodlin explained, "Before the release of the first-quarter earnings report, we originally expected Seagate to achieve a gross margin of over 50% and quarterly earnings of $5 per share in the December 2026 quarter. However, based on the company's earnings per share guidance for the June quarter provided tonight, the gross margin for this quarter (June quarter) is expected to exceed 50%. The cost reduction year-on-year matches our estimated low double-digit percentage, so it is clear that price increases are the core driver pushing gross margin expansion beyond expectations." He also stated, "With the ongoing increase in AI demand and a favorable supply-demand situation, this trend of price increases is sustainable. In fact, we expect price growth to accelerate in 2027. We now forecast that Seagate will achieve a gross margin of over 60% in June 2027, previously predicted for December 2027. Importantly, as long as incremental gross margins approach over 70%, there is every reason to believe that the company's gross margin and profitability levels have not yet reached their limits."