Seagate stock jumps after Wells Fargo upgrade to $1,100 PT

Seagate shares rose Friday after Wells Fargo upgraded the company to an Overweight rating and raised its price target to $1,100 from $900.

Wells Fargo cited growing confidence in Seagate’s long-term earnings potential and sustained demand for hard-disk drives tied to artificial intelligence infrastructure.

The upgrade followed a recent pullback in the stock; Seagate shares remain up more than 500% over the past 12 months.

Wells Fargo analyst Aaron Rakers increased his estimates ahead of the June-quarter results and projected Seagate’s annual earnings per share would climb from $21.60 this year to $53.69 by 2028. He also raised Western Digital’s price target to $730 while maintaining an Overweight rating.

During its latest earnings call, Seagate reported that the top three global cloud service providers nearly doubled their Remaining Performance Obligations to $1.1 trillion, reflecting larger long-term commitments for cloud and AI infrastructure.

Management highlighted momentum for the Mozaic platform and for heat-assisted magnetic recording, or HAMR, technology. Seagate expects 3TB-per-disk HAMR drives to ship to a first cloud service provider in 2025.

Seagate raised its annual revenue growth outlook to at least 20% and said nearline products account for about 90% of exabyte shipments. The company reported production capacity is largely allocated through 2027 under long-term supply agreements, build-to-order contracts and value-based pricing arrangements.

Wells Fargo and other analysts pointed to rising demand for high-capacity, cost-efficient HDDs as AI workloads generate more data, require longer retention and rely more on historical datasets.

Wells Fargo cited changes at industry peers as additional support: Western Digital is expanding its Platforms segment and increasing adoption of UltraSMR, with three large customers already using the technology and expectations that all major customers will qualify it by the end of 2027. Micron has signed 16 strategic supply agreements covering roughly 20% of DRAM volumes and one-third of NAND volumes; fourteen of those deals represent about $100 billion in cumulative minimum contract revenue and include projected customer deposits and financial commitments totaling $22 billion, including about $18 billion in cash deposits.

In a client note, Rakers wrote, “With the recent market pullback and increasing confidence in what we view as a path to plus-$50 earnings-per-share and significant (capital) return capacity ahead, we upgrade STX to Overweight with a $1,100 price target.”

Shares rose on the upgrade ahead of the June-quarter results.