Why Seagate Technology Stock Raced Nearly 6% Higher Today
Key Points
That prognosticator also flagged the company as his bank's top pick in the IT hardware segment.
Seagate continues to benefit from demand for resource-hungry AI technology.
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Investors were eager to store a bit of their capital in veteran data storage company Seagate's (NASDAQ: STX) stock as the trading week kicked off on Monday. They pushed the shares almost 6% higher, following a rather bullish analyst note.
This company is now tops
Morgan Stanley's Erik Woodring not only pulled the lever on a hefty Seagate price target raise, he also flagged the stock as his company's top pick in the tech hardware space. The raise was to $582 per share, well up from Woodring's former $468 fair value assessment.
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According to reports, after conducting checks of the storage industry, the analyst gleaned that demand for hard disk drive solutions continues to increase. In fact, his research indicated that this could result in shortages lasting through 2028.
Woodring also pointed out that the price of storage per terabyte is higher than he had anticipated, which is sure to positively affect the company's fundamentals.
AI advancement
We should never underestimate the impact of artificial intelligence (AI) across nearly every niche of the tech industry.
The vastly greater power of the technology requires far more resources than legacy tech, which means notably more storage space. As an incumbent storage company, Seagate is sure to benefit from this trend, and I'd be bullish both on the industry and its stock.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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