Mizuho on Tuesday increased its price target for Seagate Technology (NASDAQ:STX) to $400 from $370 and maintained an Outperform rating on the data storage company. The firm attributed the move to heightened demand linked to artificial intelligence workloads that it says is supporting nearline upside to average selling prices in the hard disk drive market.
According to Mizuho, pricing seen in third-party markets points to quarter-over-quarter average selling price growth of 15-20% or more, a dynamic the analyst expects may create room for Seagate to deliver upside to guidance in upcoming reports. The investment firm's $400 target is calculated at 26 times its fiscal 2027 earnings per share estimate, with the analyst noting that group multiples are expanding on the back of strong AI-driven price support for HDDs.
The note follows a flurry of analyst activity and product news around Seagate. BofA Securities raised its price target for the company to $400 from $320, and is modeling fiscal second-quarter revenue of $2.78 billion and earnings per share of $2.85, which BofA expects will top consensus figures of $2.74 billion in revenue and $2.81 in EPS.
Morgan Stanley also increased its target to $372, citing expectations for revenue outperformance and notable gross margin improvement in coming quarters. Rosenblatt Securities set a $370 target after Seagate introduced 32TB hard disk drives across its Exos, SkyHawk AI, and IronWolf Pro product families, reflecting what Rosenblatt described as advancements in the company’s storage technology.
Bernstein SocGen Group reiterated an Outperform rating as well, emphasizing Seagate’s leadership position in storage technology and noting that the HDD market carries a lower risk profile relative to some other segments. Seagate announced the 32TB drives at Intersec 2026 with the company saying the products are intended to bolster storage solutions for AI-driven video analytics applications. The drives will be offered through authorized channel partners beginning January 14, with price points reported in the range of $699.99 to $849.99.
Collectively, the analyst moves and product introductions underscore changing dynamics in the HDD market as firms factor AI demand into revenue, price, and margin forecasts. Mizuho’s emphasis on third-market pricing as evidence of meaningful ASP acceleration is central to its valuation methodology, while other brokerages have updated models to reflect expected revenue beats and margin expansion in the near term.
Key points
- Mizuho raised its Seagate price target to $400 from $370 and kept an Outperform rating, citing AI-driven upside to HDD average selling prices.
- Third-market pricing data cited by Mizuho suggests quarter-over-quarter ASP growth of 15-20%+ for HDDs, supporting potential upside to company guidance.
- Other firms updating views include BofA, Morgan Stanley, Rosenblatt, and Bernstein SocGen Group, reflecting product launches and expectations for revenue and margin improvement.
Risks and uncertainties
- Potential guidance upside is indicated by third-market pricing, but whether Seagate will report stronger-than-expected guidance remains uncertain.
- ASP trends reflected in third-market pricing could change, which would affect revenue and valuation assumptions tied to AI-related demand for HDDs.
- Analyst projections for revenue and margin improvement are forecasts and subject to the company’s actual quarterly results and market reception of new 32TB products.