Seagate Technology Rallies 14.55% on AI Demand Surge, Analysts Boost Price Targets

The share price rose to its highest level this month, with an intraday gain of 14.55%.

Seagate Technology’s rally reflects strong analyst optimism and AI-driven demand for hard disk drives (HDDs). Multiple firms have raised price targets, citing improved supply-demand dynamics and Seagate’s leadership in Heat-Assisted Magnetic Recording (HAMR) technology. Analysts highlight surging storage needs from artificial intelligence and cloud computing, which have fueled HDD demand outpacing supply through 2026. The company also reported a 21% year-over-year revenue increase, driven by higher shipments and pricing, alongside record gross margins projected to exceed 50% in the next year.

The stock’s performance aligns with broader sector momentum, as rivals like Western Digital also benefit from global AI adoption. Seagate’s technological edge in HAMR and a diversified product portfolio position it to capitalize on enterprise and consumer markets. However, its current valuation—trading near a 52-week high with a price-to-earnings ratio of 36.83—raises questions about sustainability. While analysts remain bullish, risks include cyclical HDD market fluctuations and potential oversupply if demand growth slows. Seagate’s proactive capital management, including a $500 million note exchange in November 2025, underscores its focus on maintaining liquidity for strategic investments amid evolving industry conditions.