Seagate (STX) Stock Hits All-Time High as Morgan Stanley Makes It Top Pick

TLDR

• Seagate (STX) hit an all-time high of $460, up 8.34% Monday and 56% in 2026 so far.
• Morgan Stanley raised its price target for STX to $582 from $468, keeping an Overweight rating.
• Seagate replaced Western Digital (WDC) as Morgan Stanley’s top pick in the HDD space.
• Morgan Stanley pushed its HDD supply/demand parity estimate out to 2029, a year later than before.
• Cantor Fitzgerald also raised its STX price target to $650 from $500, maintaining Overweight.

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Seagate Technology had a strong Monday, with its stock climbing to a record $460 — a level it has never touched before. The move came after Morgan Stanley reshuffled its rankings in the hard-disk drive space, swapping Western Digital out and putting Seagate in as its top pick.

Seagate Technology Holdings plc, STX

Morgan Stanley analyst Erik Woodring reiterated Overweight ratings on both STX and WDC but lifted Seagate’s price target to $582, up from $468. Western Digital’s target went to $380 from $369. Both stocks rallied in premarket trading, with STX up 4.6% to $449 and WDC up 3.2% to $304.38 before the open.

The bank’s reasoning is straightforward: demand for HDDs is not slowing down anytime soon. Cloud workloads keep growing, and AI is creating more data that needs to be stored somewhere. HDDs still handle around 80% of the world’s cloud data storage.

Flash memory chips are taking a slice of HDD market share each year, but it’s a slow creep. Woodring noted that the rise of agentic AI and more advanced workloads means more data is being generated, which keeps HDD demand elevated.

Morgan Stanley now expects supply and demand in the HDD market to reach parity in 2029 — one year later than its previous estimate. In a market with very few large players, that’s good news for both Seagate and Western Digital.

Why Seagate Overtook Western Digital

The switch at the top came down to a few factors. Several catalysts that had been flagged for Western Digital — including selling its remaining Sandisk stake and narrowing its valuation gap with Seagate — have already played out.

Going forward, Woodring expects Seagate’s gross margins to expand roughly 50 basis points faster than Western Digital’s over the next year. That edge comes from Seagate ramping up shipments of higher-capacity drives, which carry better margins.

Woodring was blunt about how he feels about the sector: “Our conviction on the HDD space remains higher than any end-market we cover.”

It wasn’t just Morgan Stanley piling in. Cantor Fitzgerald also raised its Seagate price target — to $650 from $500 — while keeping an Overweight rating. That move followed Western Digital’s Innovation Day, where the company laid out new tech advances and updated financial models.

Strong Earnings Backed the Moves

The analyst upgrades didn’t come out of nowhere. Seagate posted a strong fiscal Q2 2026 — earnings per share came in at $3.11 against a forecast of $2.79, and revenue hit $2.83 billion, about 3.66% ahead of estimates.

That kind of beat gives analysts a reason to revise upward. The stock’s one-year gain now stands at 556.69%, and its market cap sits at $96.2 billion.

InvestingPro flagged STX as currently overvalued relative to its Fair Value estimate, placing it on its Most Overvalued list.

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