It is a leader in its space and analysts see significant upside.
When a stock has performed as well as Seagate Technology (NASDAQ:STX) has this year, investors should always dig a little deeper to see if it has more room to run. The last thing you want to do is buy an overvalued stock high and then end up selling low.
Seagate has had a breakout year, with its share price rising 144% year-to-date to around $211 per share. And its rise has been fueled by the AI boom.
Seagate is a leader in data storage, making high-capacity hard disk drives. Its revenue has been driven to new heights in large part because of the emergence of data centers, which have created greater need for high-capacity storage. In turn, the data center boom has been fueled by AI and the need for massive computing power. Data centers have accounted for about 75% of Seagate’s $9.1 billion in revenue in fiscal 2025 – a 40% year-over-year increase.
So, Seagate is a major player in the AI ecosystem.
On top of that, Seagate is a leader in this space, along with Western Digital (NASDAQ:WDC). The two companies have a duopoly in hard disk drive storage, each holding market share of about 40% to control some 80% of the market. This gives Seagate a fairly wide moat in a booming business – a great combination.
Analysts are bullish on Seagate
In its outlook for the first quarter of fiscal 2026, Seagate sees continued growth. Revenue is anticipated to reach $2.5 billion, which would be up from $2.17 billion in the same quarter a year ago. Adjusted earnings are targeted at $2.30 per share, up from $1.58 per share a year ago.
But the long-term picture is bright, too, as data center capacity could potentially double by 2029.
Seagate stock has gotten a lot of love from Wall Street analysts in recent weeks. Bernstein rated it as outperform with a $250 price target. According to the Fly, Bernstein sees “significant long-term upside for IT hardware” on the increase in AI spending an calls Seagate its favorite in this space.
Benchmark also set a $250 per share price target, boosting it from $165, while BofA and Citi also cite Seagate as a buy with identical price targets of $215 per share. They each cite the growing demand for data storage due to AI and data centers.
With the stock currently trading at $210, analysts see significant upside for Seagate, even though it is already up $144 per share.
What makes it even more attractive is its relatively low valuation. While its P/E ratio has crept up to 31, it is still below the Nasdaq average. And it has very reasonable forward P/E of 20 with a five-year P/E-to-growth (PEG) ratio of just 1.24. Anything below 1.0 is considered a value stock, but for a growth stock like Seagate, a PEG of 1.24 is pretty low.
So Seagate stock looks like it has some room to run.
