Morgan Stanley: Actively Buy Seagate and Western Digital as HDD Fundamentals Continue to Strengthen
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Morgan Stanley maintains Overweight on Seagate and Western Digital, with targets implying roughly 82-83% upside; the analyst sees HDD repricing a playbook from memory markets a year ago, with this week's earnings as the key test.
What are the ratings and price targets?
Analyst Erik Woodring keeps Overweight on both Seagate (STX) and Western Digital (WDC), naming Seagate his top pick in IT hardware.
Seagate's target rises from $117 to $120 — versus Monday's close of $60.81, that implies roughly 82% upside.
Western Digital's target is trimmed from $76 to $63 — but against a $52.21 close, it still implies about 83% upside.
This means → even after cutting WDC's target, Morgan Stanley sees near-doubling potential in both stocks.
Why is the analyst bullish on hard drives now?
The core thesis: today's HDD market closely mirrors the memory market about a year ago — pricing is accelerating, demand is broadening, and the customer base is diversifying.
In plain terms = a year ago, AI demand sparked a memory upcycle; the same story is now replaying in hard drives.
Woodring writes that he sees "no signs of irrational pricing or capacity behavior" — both supply and demand are improving in a healthy way.
What caused the recent selloff?
Last week, a broad AI-trade unwind dragged Seagate down more than 18% and Western Digital more than 16%.
Separately, fears over Toshiba's plan to double its HDD capacity added competitive pressure.
As of Tuesday pre-market, both stocks traded below key technical moving averages — WDC at $342.31, Seagate at $647.10.
This means → Morgan Stanley views the pullback as a "favorable tactical entry," especially for Western Digital.
What comes next?
Western Digital reports earnings this Thursday after the close; Seagate's report is set for October 27.
Woodring expects both companies to deliver strong results and guidance.
In plain terms = if HDDs truly follow the memory playbook, Micron and SanDisk's post-AI-demand rally offers a reference case. This earnings cycle is the key checkpoint for that thesis.
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