Bank of America analysts raised the price target for Seagate Technology, citing significant growth potential within the AI-driven storage market.
This shift reflects a broader trend where artificial intelligence is fundamentally altering the infrastructure requirements for data centers. As AI models require massive amounts of data for training and inference, the demand for high-capacity storage is increasing.
Analysts from Bank of America said the storage business has additional upside due to this demand. The firm's new price target suggests that Seagate's share price could potentially rise by 54% [1].
The growth outlook is supported by the behavior of major cloud providers. These companies are expected to reserve hard-drive capacity through 2028 to ensure they can meet the escalating needs of AI workloads [2]. This long-term reservation of capacity provides a predictable revenue stream and suggests a sustained period of growth for the hardware manufacturer.
Seagate specializes in hard disk drives, which remain critical for the massive data lakes that fuel AI development. While flash storage is faster, the cost-efficiency of hard drives at scale makes them indispensable for the volumes of data currently being processed by cloud providers [2].
The analysts said the stock has managed to avoid the broader volatility seen in the memory sector. By focusing on the specific storage needs of the AI trade, the company is positioned to capture a specific segment of the infrastructure boom [1].
“Seagate's share price could potentially rise by 54%”
The move by Bank of America signals a transition in the AI investment thesis from purely focusing on compute power, such as GPUs, to the underlying storage infrastructure. By securing capacity through 2028, cloud providers are effectively creating a floor for demand, which reduces the risk of a sudden market correction in the storage sector.
