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Investing.com - Goldman Sachs initiated coverage on Seagate Technology (NASDAQ:STX) with a Buy rating and set a price target of $170.00. The stock, which has surged nearly 62% over the past six months and currently trades at $142.01, appears undervalued according to InvestingPro analysis.
The investment bank highlighted Seagate’s technological leadership, particularly regarding its HAMR-based drives, which are expected to help the company regain nearline HDD market share.
Goldman Sachs expects hyperscalers to ramp up HAMR adoption in the second half of 2025 and into 2026, which should benefit Seagate’s market position.
The firm expressed optimism about management’s focus on operational efficiencies as Seagate targets operating margins exceeding 30% over the medium term.
Seagate Technology, a leading provider of data storage solutions, has been advancing its Heat-Assisted Magnetic Recording (HAMR) technology to increase storage capacity in hard disk drives.
In other recent news, Seagate Technology has been the focus of multiple analyst updates following its Analyst Day event. BofA Securities raised its price target for Seagate from $125 to $135, maintaining a Buy rating, citing confidence in the company’s long-term goals and potential for revenue and margin recovery. Morgan Stanley (NYSE:MS) also increased its price target significantly from $99 to $140, highlighting Seagate’s technological leadership and strong free cash flow, while projecting an EPS of $19 by fiscal year 2028. Mizuho (NYSE:MFG) Securities adjusted its price target from $110 to $130, emphasizing Seagate’s advancements in Heat-Assisted Magnetic Recording (HAMR) technology and its competitive positioning against Western Digital (NASDAQ:WDC).
Cantor Fitzgerald maintained a Neutral rating with a $125 price target, noting some investor confusion about Seagate’s revenue growth projections but acknowledging the company’s revised financial targets. Analysts are generally optimistic about Seagate’s potential to benefit from the growing demand in cloud computing and data centers, with expectations of significant growth in data center Exabytes driven by artificial intelligence. Additionally, Seagate’s financial targets include a low-to-mid teens revenue compound annual growth rate from fiscal year 2025 to 2028, with expectations of gross margins over 40% and operating expenses around 10% of revenues.
The company’s commitment to returning over 75% of free cash flow to shareholders and its plans for a $5 billion share buyback were also noted. These developments reflect a positive outlook for Seagate Technology as it continues to innovate and expand its presence in the data storage market.
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