Seagate (STX) Stock Soars to Record High After Morgan Stanley Upgrade

TLDR

• Seagate (STX) surged to a record $460, gaining 8.34% on Monday and climbing 56% year-to-date in 2026.
• Morgan Stanley boosted its STX price target from $468 to $582 while maintaining an Overweight rating.
• The investment bank replaced Western Digital (WDC) with Seagate as its preferred pick in the hard disk drive sector.
• Analysts now project HDD market equilibrium won’t arrive until 2029, pushing back previous forecasts by one year.
• Cantor Fitzgerald separately increased its STX target from $500 to $650, keeping its Overweight stance.

Seagate Technology delivered an impressive performance on Monday, with shares reaching an unprecedented $460 — marking a new pinnacle for the data storage company. The rally followed Morgan Stanley’s decision to reorganize its hard-disk drive sector preferences, elevating Seagate to the top position while downgrading Western Digital.

Seagate Technology Holdings plc, STX

Morgan Stanley’s Erik Woodring maintained Overweight recommendations for both STX and WDC while increasing Seagate’s price objective to $582 from the previous $468. Western Digital’s target moved to $380 from $369. In premarket activity, both stocks posted gains, with STX climbing 4.6% to $449 and WDC advancing 3.2% to $304.38.

The investment bank’s logic centers on sustained HDD demand. Cloud infrastructure continues expanding, while artificial intelligence generates massive volumes of data requiring storage solutions. Hard disk drives still manage approximately 80% of global cloud data storage.

While flash memory chips gradually capture HDD market share, the transition remains gradual. Woodring highlighted that emerging agentic AI applications and sophisticated workloads are producing unprecedented data volumes, sustaining robust HDD demand.

Morgan Stanley’s updated forecast pushes HDD market equilibrium to 2029 — extending the previous timeline by twelve months. With limited major competitors in the space, this development benefits both Seagate and Western Digital.

Why Seagate Overtook Western Digital

The leadership change resulted from several considerations. Key catalysts previously identified for Western Digital — including divesting its remaining Sandisk position and closing valuation differences with Seagate — have already materialized.

Looking ahead, Woodring projects Seagate’s gross margins will expand approximately 50 basis points faster than Western Digital’s over the coming year. This advantage stems from Seagate’s accelerated deployment of higher-capacity drives, which deliver superior profitability.

Morgan Stanley wasn’t alone in its optimism. Cantor Fitzgerald lifted its Seagate price objective to $650 from $500 while maintaining an Overweight rating. This adjustment followed Western Digital’s Innovation Day, where the company unveiled technological advancements and revised financial projections.

Strong Earnings Backed the Moves

The analyst revisions followed solid financial performance. Seagate delivered robust fiscal Q2 2026 results — reporting earnings per share of $3.11 versus consensus expectations of $2.79, while revenue reached $2.83 billion, exceeding projections by approximately 3.66%.

Such performance metrics provide substantial justification for upward analyst revisions. The stock has surged 556.69% over the past twelve months, with market capitalization now standing at $96.2 billion.

InvestingPro identified STX as trading above its Fair Value assessment, placing it on the platform’s Most Overvalued list.

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