wedbush Analyst Matt Bryson promoted Seagate Technology Holdings Co., Ltd. (NASDAQ:STX) from Neutral to Outperform with a $100 price target.
This reassessment reflects an improving demand environment for nearline hard disk drives (HDDs), and Bryson's near-term expectations and belief that heat-assisted magnetic recording (HAMR) is a “good” technology. There is upside potential in the strengthening of , and HAMR is only likely to reinforce the favorable nearline trend.
According to the analyst, more reliable progress on HAMR will create room for market share, margins, and profits to grow over the medium to long term.
Also read: Seagate's success is certain; analysts highlight strength in demand and pricing
Bryson's checks are consistent with STX's suggestion that the recent hold-up in qualifications is a component issue rather than a more serious technology issue. The analyst noted that while there are still some manufacturing challenges that likely need to be resolved to reap the full benefits of HAMR, there are fundamental issues behind STX. .
Bryson pointed out. Broadcom's (NASDAQ:AVGO) STX's recent purchase of SoC works was done as a validation of HAMR's technological path/advancement as Broadcom CEO Hock Tan has not specifically invested in green shoots.
Finally, given that differentiated enterprise drives have traditionally seen margins of 40% or more, Bryson believes that STX will continue to grow in revenue over the next few years, as the new revenue forecast for fiscal 2026 suggests. He pointed out that there is room for significant improvement in gender performance.
Bryson released new forecasts for 2026 EPS of $11.68, revenue of $11.761 billion, gross margin of 35.1% and operating margin of 25.6%, which is much more This may support the current stock price target. His predictions are going to start taking into account his HAMR benefits regarding HDD, ASP, and gross margin.
Bryson expected fourth-quarter sales of $1.87 billion and EPS of $0.78.
Seagate stock has increased 49% in the past 12 months. Investors can gain exposure to stocks through: First Trust Dorsey Wright Momentum & Dividend ETF (NASDAQ:DDIV) and IShares Future Cloud 5G and Technology ETF (NYSE:IDAT).
Price action: STX stock was trading 1.82% higher at $87.47 at last check on Wednesday.
Also read: Micron, Seagate, Western Digital ready to rise due to soaring NAND prices, analysts predict
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