June 21, 2024

Morgan Stanley’s Upgrade and 9% Increase in Seagate Technology Stock Price: What It Means for Investors and the Data Storage Industry

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The Surge in Seagate Technology Stock Price Today

Seagate Technology (STX) stock is experiencing a 9% increase in share price as of 3 p.m. ET on Tuesday, attributed to a note published by Morgan Stanley this morning. The firm 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, suggesting that they believe the storage hardware specialist will reach a new peak valuation in the near future. Despite a 56% increase in the last year, Seagate stock is still down about 17% from its high. However, Morgan Stanley’s coverage suggests that they anticipate that demand related to the rise of generative AI will be a significant performance driver for Seagate.

The data storage industry is on an upward trend and AI-related demand is growing, which could lead to 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, while The Motley Fool also has no position in any of the stocks mentioned and has a disclosure policy.

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