Disk drive makers rip, analyst cites conviction on cycle upswing
Western Digital and Seagate Technology Holdings — makers of the affordable data storage devices known as hard disk drives — surged Monday amid a general upswing in the AI data center trade and after a specific shout-out to the sector by Morgan Stanley IT analysts.
The analysts ratcheted up their price targets — to $171 from $99 for WDC, and to $265 from $168 for Seagate — and earnings estimates for both stocks, both of which they rate “overweight” (essentially a “buy”).
They wrote:
“While we’ve been hard disk drive (HDD) bulls for the better part of two years, HDD demand has recently inflected — the result of strengthening cloud infrastructure spending ($3T through 2028), accelerating investments in data-enabling technologies, and AI inferencing — both agentic and multi-modal — emerging as an incremental tailwind to data-rich media generation and data retention needs.
At the same time, the market remains up to 10% undersupplied per our recent checks, and as a result, nearline HDD prices are firming and visibility has recently extended into [the first half of calender 2027], an unprecedented 18+ months from now.”
The two disk drive makers are the second- and third-best performers in the S&P 500 this year, with Seagate up roughly 170% and Western Digital up about 160%.
