Seagate Stock Is Up 6.6% This Week as the AI Storage Rally Continues

Key Stats for STX Stock

• Past week performance: +6.6%
• 52-week range: $164 to $1,145
• Valuation model target price: $1,397
• Implied upside: +64.9% over 2.8 years

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The AI Storage Boom Keeps Delivering

Seagate Technology (STX) climbed 6.6% this week, extending a rally that began when the company posted a blowout fiscal Q4 report in late July. Adjusted EPS came in at $5.71, crushing the $5.09 estimate, while fiscal 2026 revenue grew 34% to $12.2 billion. The driver behind those numbers is simple: AI data centers need enormous amounts of storage capacity, and Seagate makes the high-capacity hard drives that hold it.

Mass capacity products, the drives built for cloud and AI workloads, grew revenue 45% in Q4 alone and 60% for the full fiscal year. Seagate is now ramping its next-generation HAMR technology, which packs over 30 terabytes onto a single drive, to keep pace with hyperscaler demand for ever denser storage.

Management’s guidance suggests the momentum has legs. Seagate guided fiscal Q1 2027 revenue to $3.25 billion to $3.55 billion, above the roughly $3.2 billion consensus, and adjusted EPS to $5.60 to $6.40, well above the roughly $5.25 estimate. Insider selling from the CFO and other executives has picked up in August, but that activity looks routine against a backdrop of soaring fundamentals rather than a warning sign.

If Seagate stock keeps climbing at this pace, fiscal Q1 earnings in late October become the next real test of whether AI storage demand can sustain itself into 2027.

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Is STX Stock Still a Buy After This Run?

Under valuation model assumptions realized through 6/30/29, the stock is modeled using:

• Revenue Growth (CAGR): 34.0%
• Operating Margins: 36.0%
• Exit P/E Multiple: 23.7x

Based on these inputs, the model estimates a target price of $1,397, implying 64.9% total upside from the current share price and a 19.2% annualized return over 2.8 years.

That 19.2% annualized return sits well above the 15% threshold TIKR generally uses to flag a stock as undervalued, and it comes even after Seagate shares have already returned over 400% in the past year. Because the valuation model’s growth and margin assumptions roughly match Seagate’s own recent trajectory- forward two-year revenue CAGR of 43.5% and improving operating margins- the target price does not require heroic assumptions to work.

Margins are the real story here. Seagate’s trailing EBIT margin already sits at 34.7%, close to the model’s 36.0% assumption, while return on equity has exploded to 371.5%, as high-capacity drives carry far better economics than legacy consumer products. A 23.7 times exit multiple is roughly in line with Seagate’s current NTM P/E of 23.7x, so the model is not betting on multiple expansion either.

The risk is that hard drive markets have historically been cyclical, and a slowdown in hyperscaler capital spending could hit Seagate’s growth quickly given its customer concentration.

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Seagate vs. Western Digital: A Storage Arms Race

Western Digital (WDC) is Seagate’s closest public competitor, and the two companies are riding the same AI storage wave in parallel. Western Digital posted fiscal Q4 revenue of $3.75 billion, up 44% year over year, slightly outpacing Seagate’s 34% full-year growth rate, while its non-GAAP operating margin reached 44.2%, above Seagate’s trailing 34.7% EBIT margin.

Both companies benefit from the same structural tailwind: hyperscalers need more storage capacity per AI server than traditional computing ever required, and neither company can currently produce enough high-capacity drives to meet demand. That dynamic has kept pricing favorable for both.

Samsung represents a longer-term wildcard competitor in enterprise storage, though its footprint in high-capacity hard drives remains smaller than either Seagate’s or Western Digital’s. For now, the two-company duopoly in nearline storage gives both Seagate and Western Digital unusual pricing power, a dynamic that shows up clearly in their expanding margins.

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What’s Driving STX Stock Going Forward?

Seagate’s HAMR ramp is the single most important catalyst ahead. The technology allows drives to exceed 30 terabytes, and successful scaling determines whether Seagate can keep winning hyperscaler contracts against Western Digital’s own capacity gains.

Customer concentration remains a watch item. Cloud customers already represent the overwhelming majority of Seagate’s revenue, so any pullback in hyperscaler capital spending would hit the company disproportionately compared with more diversified peers.

Competitive dynamics with Western Digital and, longer term, Samsung will shape pricing power. So far, tight supply has kept both major players benefiting simultaneously rather than competing on price.

Fiscal Q1 2027 earnings in late October will be the next checkpoint, with investors watching for confirmation that mass capacity demand and HAMR shipments are tracking guidance.

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Should You Invest in Seagate?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up STX, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track STX alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!