Seagate Technology (STX) looks like one of the most compelling AI infrastructure plays hiding in plain sight, and Wall Street is starting to agree.
Evercore ISI recently raised its price target on the hardware stock to $1,000, up from $750, while maintaining an “Outperform” rating. With STX shares trading near $809 below their 52-week high of $841, the STX stock price target implies roughly 25% upside from current levels. For a company already in the midst of a structural growth phase, that kind of headroom is worth paying attention to.
Valued at a market cap of $181 billion, Seagate stock has already surged about 1,300% over the past three years.
Why Seagate's HAMR Technology Is Changing the Game for Hard Disk Drive Demand
Seagate makes hard disk drives (HDD). For years, that business was viewed as a slow-dying relic, losing ground to flash storage, a narrative that seems broken in 2026.
Artificial intelligence is driving an explosion in data creation. Every AI chatbot query, every autonomous vehicle sensor stream, every agentic workflow that runs continuously in the background, all of it produces data that needs to be stored somewhere, making STX a top stock to own right now.
Seagate Chief Executive Dave Mosley put it plainly on the company's most recent earnings call: "Leading AI chatbots now handle billions of user prompts daily, each consuming and producing multimodal outputs that fuel an unprecedented surge in data creation."
A single autonomous vehicle can generate up to 4 terabytes of data per hour. Companies are required to retain much of that data for five to 10 years for compliance purposes, driving demand for hard drives.
Evercore ISI Says Seagate's Growth Is Structural, Not Cyclical
Following a direct meeting with Seagate Chief Financial Officer Gianluca Romano and Senior Vice President of Investor Relations Shanye Hudson, Evercore ISI came away with a sharper conviction in the story.
The firm's key takeaway: Seagate is focused on packing more data per disk, through a technology called heat-assisted magnetic recording (HAMR), rather than building additional drives.
According to Evercore ISI:
- Seagate believes it can grow its storage supply at a compound annual rate of roughly 20% or more over the next several years, with customer demand tracking higher.
- Nearline capacity, the high-density drives used in cloud data centers, is nearly fully allocated through calendar year 2027, with build-to-order contracts locking in specific pricing and configurations.
In its fiscal third quarter that ended March 2026, Seagate grew revenue 44% year-over-year (YoY) to $3.1 billion. Gross margins hit a record 47%, and free cash flow nearly reached $1 billion.
Out of the 25 analysts covering STX stock, 21 recommend “Strong Buy,” one recommends Moderate Buy,” and three recommend “Hold.” The average STX stock price target is $776, below the recent price of $809.
Wall Street forecasts Seagate to more than double revenue by 2030 from $9.10 billion in fiscal 2025 to $31 billion in fiscal 2030. In this period, adjusted earnings-per-share are projected to expand from $8.10 to $90.81.
If Seagate stock is priced at 20x forward earnings, it could more than double within the next three years.
HAMR Technology Is a Key Driver
Evercore ISI also noted that NAND flash pricing, often assumed to be Seagate's biggest competitive threat, rarely displaces hard drives in data centers. The two technologies serve fundamentally different roles.
If anything, Seagate benefits from being the least constrained bottleneck in a data center build-out: power, memory, and processing components are typically what slow deployments down, not hard drives.
By the end of fiscal year 2027, roughly 70% of Seagate's nearline shipments will run on HAMR technology, with the second-generation Mozaic 4 platform, capable of storing up to 40 terabytes per drive, becoming the dominant product exiting calendar 2026.
Evercore ISI's $1,000 price target is not a moonshot. It reflects a company with record margins, locked-in revenue visibility through 2027, a technology road map that's ahead of schedule, and demand that, by management's own account, exceeds supply.
For investors looking for an AI trade with real cash flows behind it, Seagate deserves a serious look.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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