Seagate Technology Holdings plc closed Friday at $782.64, hovering near its all-time high, as investors continue to bet on the expanding role of hard disk drives (HDDs) in the AI data storage ecosystem. The stock's rally reflects a broader shift in the artificial intelligence trade, which is now extending beyond semiconductor makers to include storage hardware companies benefiting from the insatiable demand for cost-effective data storage solutions.
The company's fiscal third-quarter results, reported last month, showed revenue of $3.11 billion and GAAP diluted earnings per share of $3.27. On a non-GAAP basis, earnings came in at $4.10 per share. For the fiscal fourth quarter, Seagate forecasts revenue of approximately $3.45 billion, plus or minus $100 million, and non-GAAP diluted earnings per share of $5.00, within a 20-cent range. CEO Dave Mosley described the outlook as a “new era of structural growth,” emphasizing that AI is amplifying demand for existing applications like video streaming.
Morningstar analysts believe the AI buildout will support HDD pricing power through 2030. Executives from Seagate and Western Digital have indicated that their capacity is already allocated or sold out through the end of calendar 2026. Morgan Stanley recently raised its price target on Seagate to $767 from $582, maintaining an Overweight rating. The firm cited stronger-than-expected pricing, margins, and earnings power, noting that HDDs still handle roughly 80% of cloud storage demand.
The broader storage sector is echoing this optimism. Sandisk projected quarterly revenue above Wall Street expectations last week, aligning with Western Digital and Seagate in pointing to robust enterprise demand for storage gear powering AI data centers. Western Digital's revenue outlook also surpassed estimates. However, shares of both Sandisk and Western Digital declined after the announcements, suggesting that investors may be looking for fresh catalysts after a prolonged rally.
Seagate shares have nearly tripled in 2026, while Western Digital and Micron have more than doubled over the same period. Roundhill CEO Dave Mazza described memory as the “most supply-constrained layer” in the AI infrastructure push, according to a recent report.
Despite the strong momentum, valuation concerns are emerging. Seagate’s market capitalization stood at approximately $179.2 billion, with a price-to-earnings ratio near 74—leaving little room for error if pricing weakens or cloud demand cools. Michael Ashley Schulman, partner at Cerity Partners, noted that competing storage forecasts have not provided the “wow factor” needed to sustain the current pace of gains.
In a separate development, Seagate announced that Michael R. Cannon, who has served as lead independent director since 2011, plans to step down when his current term ends in October. According to an SEC filing, his departure is not related to any disagreement with the company’s operations or policies.
For now, Seagate remains a standout in the hardware space, with demand running hot, supply constrained, and major cloud providers seeking affordable mass storage. The key question is whether the stock has already priced in too much optimism ahead of the next earnings report.
