Downgrade reflects worries that hard disk drive pricing expectations may outpace actual increases, despite strong AI-driven demand.
Fox Advisors lowered Seagate Technology (NASDAQ:STX) to Equal-Weight from Outperform, citing concerns that hard disk drive pricing expectations may be overstated. The firm noted potential misalignment between market optimism and likely price increases, despite broader industry trends.
Wells Fargo recently raised its price target for STX to $900 from $700, maintaining an Equal Weight rating. The firm highlighted strong demand from AI data center expansions and memory growth, driven by AI inferencing and server CPU demand during its Silicon Valley Bus Tour.
Seagate produces data storage solutions, including hard disk drives and solid-state drives, critical for AI and cloud infrastructure. The downgrade contrasts with bullish sentiment around AI-related stocks, though some analysts see greater upside in other AI plays.