Morgan Stanley Names Seagate Top Pick
Morgan Stanley names Seagate top pick and raised its price target to $582, citing stronger HDD pricing and supply tightness that could lift margins.
KEY TAKEAWAYS
- Morgan Stanley named Seagate top pick and kept an Overweight rating, citing HDD demand and shortages through CY2028.
- Analyst raised Seagate price target to $582 from $468, implying about 35% upside.
- Price per terabyte exceeded expectations, driving faster gross-margin expansion at Seagate versus Western Digital.
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Morgan Stanley named Seagate Technology (STX) its top pick on April 6, 2026, maintaining an Overweight rating and citing strengthening hard-disk demand alongside a supply/demand tracker that implies shortages through calendar year 2028. The firm said these factors could boost Seagate’s margins.
Top Pick and Price Target
Morgan Stanley analyst Erik Woodring raised Seagate’s price target to $582 from $468, implying about 35% upside from the April 3 closing price of $429.36. The firm replaced Western Digital with Seagate as its preferred IT-hardware stock. Woodring also raised estimates for both Seagate and Western Digital, reflecting revised assumptions on drive pricing and demand.
Supply Constraints and Margin Outlook
Morgan Stanley’s market checks show hard-disk drive (HDD) demand continues to strengthen, with its supply/demand tracker signaling shortages through 2028. The firm said price per terabyte has exceeded expectations, driving gross margins and earnings per share above consensus. It expects Seagate to expand gross margins faster than Western Digital over the next 12 months due to a more robust product lineup.
The research note described HDDs as among the hardware most leveraged to data-center artificial intelligence spending and called them a critical bottleneck for cloud-service providers. This positions Seagate as a direct way to capture sustained investment in data-center infrastructure.
