Seagate Stock Surges on Morgan Stanley’s Upgrade: Analysts Expect AI-Driven Performance Boost

The Surge in Seagate Technology Stock Prices Today

Seagate Technology (STX) stock is experiencing a surge in the trading session on Tuesday, with its share price up 9% as of 3 p.m. ET. Morgan Stanley has released a report on Seagate, upgrading its rating from equal weight to overweight and raising its one-year price target from $73 per share to $115 per share.

Seagate’s stock has risen approximately 56% over the past year but is still down around 17% from its peak. Despite this, Morgan Stanley’s latest coverage suggests that the company anticipates reaching a new valuation high in the near future.

The analysts at Morgan Stanley believe that Seagate will benefit from the ongoing recovery in the data storage market and its leading position in heat-assisted-magnetic-recording (HAMR) technologies. They also expect demand for Seagate’s products to be driven by generative artificial intelligence (AI), which could lead to significant performance improvements for the company.

Morgan Stanley projects that Seagate’s near-term earnings performance could be 25-30% better than previously expected due to AI-related demand and an upturn in the data storage industry. The rise of AI is expected to boost performance and potentially lead to higher valuation multiples for Seagate and other data storage companies, resulting in improved sales, earnings, and overall market sentiment towards the sector.

It’s important to note that Keith Noonan and The Motley Fool have no positions in any of the mentioned stocks and have disclosed their policy regarding this information.

Sophia Reynolds

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