Analyst Erik Woodring of Morgan Stanley maintained a Buy rating on Seagate Tech (STX – Research Report), retaining the price target of $138.00.
Erik Woodring has given his Buy rating due to a combination of factors that highlight the potential of Seagate Technology’s stock. Despite concerns about SSDs potentially disrupting the HDD market, Woodring emphasizes that HDDs still hold a significant advantage in data centers, which account for a large portion of cloud storage capacity. This advantage is supported by the fact that HDDs are currently responsible for 80-90% of total cloud storage, suggesting that the risk of SSDs overtaking HDDs is not as imminent as some investors may fear.
Furthermore, while companies like META are exploring the use of QLC SSDs, these cases are relatively isolated and not indicative of a widespread shift away from HDDs. The cost-effectiveness of HDDs, being 6-8 times cheaper than SSDs, ensures their continued relevance, especially as data growth is expected to continue at a robust pace. Woodring’s analysis suggests that HDDs will maintain their primary role in data centers, supporting his positive outlook on Seagate Technology as a top pick in the IT hardware sector.
In another report released yesterday, Citi also maintained a Buy rating on the stock with a $115.00 price target.
Based on the recent corporate insider activity of 93 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of STX in relation to earlier this year.