Morgan Stanley Upgrades Seagate Technology to Overweight, Citing Growth Potential of Data Storage Market

The Surge in Seagate Technology Stock Price Today

In Tuesday’s trading, Seagate Technology (STX) stock is surging, with a 9% increase in share price as of 3 p.m. ET. Morgan Stanley has just upgraded its rating on Seagate from equal weight to overweight, citing the growth potential of the data storage market and the company’s position in HAMR technologies. The analysts also raised their one-year price target on Seagate stock from $73 per share to $115 per share.

Despite a 56% increase in the last year, Seagate stock is still down about 17% from its high. However, Morgan Stanley’s coverage suggests that they believe the storage hardware specialist will reach a new peak valuation in the near future. The firm predicts that Seagate will benefit from the recovery in the data storage market and its position in HAMR technologies, which will lead to stronger sales and earnings performance. Furthermore, they anticipate that demand related to the rise of generative AI will be a significant performance driver.

With the data storage industry on an upswing and AI-related demand growing, Seagate’s profitability could see substantial improvements. Morgan Stanley’s analysts believe that Seagate’s earnings performance in the near term could exceed expectations by 25% to 30%. Additionally, the connection to the AI revolution may result in investors assigning higher valuation multiples to Seagate and other data storage stocks.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool also has no position in any of the stocks mentioned and has a disclosure policy.

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