Seagate Technology (STX) climbed 2.5% in Monday's premarket trading, rebounding after a challenging July where the stock fell 11%. The hard-disk drive manufacturer is set to announce its earnings after market close on Tuesday, July 28.
Over the past year, STX has surged more than 450%, fueled by the AI boom, making it one of the standout performers in the tech hardware space. However, July has proved difficult, marked notably by a 6% drop last Friday, the worst monthly decline since March 2025. The stock finished Friday just above its 50-day moving average.
Analyst Optimism and Market Expectations
Wedbush analyst Matt Bryson remains bullish, reiterating an Overweight rating and raising his price target from $825 to $1,000. Bryson anticipates Seagate will exceed consensus earnings estimates thanks to modest price hikes and an improved product mix. Wall Street expects earnings per share of $5.10, representing a 96% increase year-over-year, alongside $3.5 billion in revenue, up 43%, according to FactSet data.
Strong demand for hard drives is expected to persist through 2027, driven mainly by cloud hyperscalers. These companies require vast storage capacities for AI model training, positioning Seagate and its main competitor, Western Digital, to benefit from increased infrastructure spending.
Contracts and Industry Dynamics
Current long-term agreements between HDD makers and hyperscalers may limit near-term growth. Still, Bryson points out that new contracts kicking in late 2026 will likely feature higher average selling prices, providing a tailwind going forward. For context, Wedbush also raised its target for Western Digital to $650 from $540 ahead of WDC’s August 5 earnings report.
Both Seagate and Western Digital, along with peers like Micron and Sandisk, have seen stock pressure during July. Seagate holds an IBD Composite Rating of 87 out of 99, ranking highly within the Computer-Hardware/Peripherals sector.
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