U.S. Storage Stock “Hot Pick” Seagate Surges Nearly 20%

One of the standout Wall Street performers over the past year had another big day on Wednesday: data storage device maker Seagate Technology Holdings (STX) stock closed up 19.11% at $265.62.  

 

Earlier, the company released Q1 earnings far exceeding market expectations and forecasted continued strong growth next quarter. Driven by explosive data storage demand from AI and cloud computing, Seagate’s stock has soared over 200% this year. This trend has enabled consistent price hikes and margin expansion.  

 

Analysts note the latest earnings confirm these fundamentals remain robust. Specifically, adjusted EPS was $2.61, topping the consensus estimate of $2.40. Revenue hit $2.63 billion, up 21% year-over-year, beating the $2.55 billion forecast.  

 

 

Looking ahead, Seagate forecasts Q2 revenue of $2.7 billion (±$100 million), slightly above the $2.67 billion estimate, and EPS of $2.75 (±$0.2).  

 

 

Wall Street Cheers  

Morgan Stanley analyst Erik Woodring called it “a live bull market unfolding.” Price hikes and shifts to higher-capacity drives drove adjusted gross margins to a record high, the “most impressive part” of the report.  

 

Woodring wrote: “We expect similar tailwinds to drive margins higher going forward.”  

 

Morgan Stanley maintains an “Overweight” rating and raised the price target from $265 to $270.

 

Benchmark Equity Research analyst Mark Miller highlighted robust cloud demand and rising PC production with AI chips. Miller added that Seagate’s backlog now extends into 2027.  

 

Benchmark raised 2026 and 2027 earnings growth forecasts post-earnings, maintaining a “Buy” rating and lifting the target from $250 to $255.

 

Even the sole Wall Street bear conceded Seagate’s performance.  

 

Susquehanna International Group expects storage product capacity shipments to peak in H1 2027, after which revenue and margins may slide in this highly cyclical industry.  

 

But analyst Mehdi Hosseini noted the report shows “solid execution, no doubt.”  

 

Susquehanna maintains a “Sell” rating—the only one per FactSet—but nearly doubled its target from $80 to $150.$STX