Seagate Technology (STX -0.56%) has experienced a significant rally over the past year due to improvements in the data storage industry and the anticipation of increased demand for artificial intelligence (AI) technology. The company’s share price has seen a substantial increase, rising by 11% since the beginning of 2024 and climbing by 54% over the last 12 months. This positive momentum has some investors on Wall Street believing that the stock has the potential to continue rising.
Recently, Morgan Stanley upgraded its rating on Seagate stock from equal weight to overweight and raised its price target from $73 to $115 per share. If Seagate were to meet Morgan Stanley’s price target, it would reach an all-time high valuation and provide an upside of approximately 21% from its current trading price. This upgrade reflects the belief that Seagate is well-positioned in the industry, stands to benefit from cyclical improvements, and is likely to experience increased demand due to advancements in AI technologies.
Seagate’s position in the data storage market is cyclical, with demand and pricing trends fluctuating over time. Currently, Seagate appears to be in a favorable position with tailwinds supporting its growth. Morgan Stanley anticipates Seagate’s earnings for the year to be 25% to 30% higher than previously estimated, with the potential for AI-related storage needs to provide a long-term boost. As AI technology continues to rise in popularity, Seagate could be entering a period of significant growth.
While there are still many unknowns about how AI will impact Seagate’s business, there are reasons for optimism about its future prospects in this rapidly growing field. With advancements in AI driving increased demand for data storage solutions, it seems like there is no shortage of opportunities for Seagate in this space. In fact, this trend aligns with Morgan Stanley’s positive outlook on the stock as a promising investment opportunity.
Overall, it seems like now is an exciting time for investors looking at Seagate Technology (STX -0.56%) as a potential investment opportunity within the tech industry.