Key Takeaways
- Seagate’s Q4 earnings release is scheduled for Tuesday, with Wall Street forecasting EPS of $5.10 and sales of $3.5 billion
- Wedbush Securities boosted its STX price target to $1,000 from $825 while reaffirming an Overweight rating
- After an 11% July decline and a 6% Friday selloff, STX recovered 2.5% to $872.53 during Monday’s premarket session
- New hyperscaler contracts featuring higher pricing structures are anticipated to commence in late 2026
- Western Digital (WDC) also received a Wedbush upgrade to $650 from $540 before its August 5 earnings date
Shares of Seagate Technology (STX) climbed 2.5% to $872.53 during Monday’s premarket session following a challenging trading week. The storage technology company is set to release its quarterly results after market close on Tuesday, July 28.
Seagate Technology Holdings plc, STX
Over the trailing twelve months, the stock has skyrocketed more than 450%, positioning it among the top performers benefiting from the artificial intelligence boom. However, recent weeks have proven difficult. Through July, STX has declined 11%, with Friday’s session alone accounting for a 6% loss. This marks its steepest monthly decline since March 2025.
Seagate finished Friday’s trading session marginally above its 50-day moving average.
Wedbush Securities analyst Matt Bryson maintained his Overweight rating on Monday while increasing his price objective to $1,000 from $825. Bryson anticipates Seagate will surpass consensus projections, supported by modest pricing improvements and an enhanced product portfolio.
“We believe modest pricing gains coupled with an improved product mix should enable Seagate to once again deliver results above forecasts,” Bryson stated.
According to FactSet data, Wall Street consensus projections call for quarterly earnings of $5.10 per share, representing a 96% year-over-year increase, alongside revenue of $3.5 billion, marking a 43% jump.
Persistent HDD Market Strength
Bryson emphasized that both demand pressures and supply limitations within the hard-disk drive sector are projected to persist through 2027. Major cloud providers continue fueling this demand, utilizing HDDs for storing enormous data volumes required for artificial intelligence model development.
Both Seagate and Western Digital control the HDD marketplace and have emerged as primary beneficiaries of infrastructure investments tied to AI expansion.
A crucial consideration: current long-term supply agreements between HDD manufacturers and cloud hyperscalers might limit immediate upside potential. Nevertheless, updated contracts scheduled to take effect in late 2026 feature elevated average selling prices, which Bryson views as a positive catalyst extending into 2027.
Western Digital Receives Similar Upgrade
Wedbush Securities also increased its Western Digital price target to $650 from $540, with Bryson maintaining his Overweight stance on that stock as well.
“We expect WDC to deliver results exceeding consensus, with potentially greater upside opportunity given a more cautious gross margin forecast,” Bryson noted.
Western Digital’s earnings announcement is scheduled for August 5. Analyst consensus estimates project WDC will report earnings of $3.30 per share with revenue reaching $3.7 billion for the quarter.
STX, WDC, Micron (MU), and Sandisk (SNDK) frequently move in tandem and have all experienced declines throughout July.
Seagate maintains an IBD Composite Rating of 87 out of 99, ranking seventh within the Computer-Hardware/Peripherals industry category.
Wall Street consensus estimates for Seagate’s fiscal fourth quarter point to $5.08 per share in earnings on $3.49 billion in revenue, based on analyst projections compiled by Seeking Alpha.
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