Morgan Stanley Upgrades Seagate Technology to Overweight and Raises Price Target, Boosts Stock Price by 9%

The Surge in Seagate Technology Stock Price Today

Seagate Technology (STX) is experiencing growth in its stock price, with a 9% increase as of 3 p.m. ET on Tuesday. This growth is attributed to a note published by Morgan Stanley this morning, which upgraded its rating on Seagate from equal weight to overweight and raised its one-year price target from $73 per share to $115 per share.

Despite an increase of 56% in the last year, Seagate stock is still down about 17% from its high. However, Morgan Stanley’s coverage suggests that they believe the storage hardware specialist will reach a new peak valuation in the near future. The firm predicts that Seagate will benefit from the recovery in the data storage market and its position in HAMR technologies, which will lead to stronger sales and earnings performance. Furthermore, they anticipate that demand related to the rise of generative AI will be a significant performance driver.

The data storage industry is on an upswing and AI-related demand is growing, which could see substantial improvements in Seagate’s profitability. Morgan Stanley’s analysts believe that Seagate’s earnings performance in the near term could exceed expectations by 25% to 30%. Additionally, the connection to the AI revolution may result in investors assigning higher valuation multiples to Seagate and other data storage stocks.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool also has no position in any of the stocks mentioned and has a disclosure policy.

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