Morgan Stanley has increased its target price for Seagate Technology to $468 from $372 while maintaining an Overweight recommendation on the storage hardware vendor. The firm pointed to a string of operational and financial improvements as the basis for the upgrade.
In its note, Morgan Stanley cited broad-based gains across several metrics: revenue growth, gross margins, operating margins and earnings per share. The bank underscored Seagate's March-quarter guidance as particularly meaningful, noting that the company’s margin outlook topped consensus expectations.
The analyst view framed the recovery in hard disk drive demand as being led by data center customers. Morgan Stanley attributed strengthening requirements for data center storage to content-heavy workloads such as video and AI applications, along with other data-intensive uses. That mix is supporting a more favorable supply and demand backdrop, which the firm says is improving HDD pricing. At the same time, Seagate’s shift toward higher-capacity drives is contributing to expanding profit margins.
Technical deployment milestones were central to Morgan Stanley’s assessment. Seagate’s HAMR - Heat-Assisted Magnetic Recording - Mozaic 3 platform shipped more than 1.5 million units in the quarter, up from roughly 1 million in the prior quarter. The note stated that all major U.S. cloud service providers have qualified on Mozaic 3, and that Mozaic 4 qualifications are expanding with an expected ramp in the second half of 2026.
Following these operational and market signals, Morgan Stanley raised its fiscal 2027 estimates for Seagate by 25 percent, indicating that additional upside may come from improved pricing and elevated gross margins.
Seagate’s most recent reported quarter, fiscal Q2 2026, provided the near-term evidence supporting the analysts’ optimism. The company posted revenue of $2.83 billion, above the $2.73 billion consensus. Adjusted earnings per share came in at $3.11, outpacing the $2.79 estimate.
Seagate’s results reflected 21.5 percent year-over-year revenue growth, driven by strong demand from the data center segment and a 26 percent year-over-year increase in exabyte shipments. Those volume gains and higher-capacity product mix helped the company beat top- and bottom-line forecasts.
Independent of Morgan Stanley’s move, Evercore ISI lifted its price target for Seagate to $450 from $330 and kept an Outperform rating, citing continued confidence in Seagate’s market position and growth trajectory.
The combination of upgraded analyst estimates, accelerating HAMR shipments and better-than-expected quarterly results frames a constructive near-term outlook for Seagate. Market dynamics in data center storage and the evolution of capacity mix are central to the thesis supporting higher valuations and margin expansion.