tl;dr
Shares of Western Digital and Seagate Technology have doubled in 2025, fueled by AI and cloud demand. Morgan Stanley upgrades price targets, predicting 60% and 22% gains, as data storage becomes critical for the digital future.
Shares of Western Digital and Seagate Technology have experienced a remarkable surge, with both stocks more than doubling in value since the start of 2025. This meteoric rise has caught the attention of analysts, who see continued momentum driven by the escalating demand for data storage fueled by artificial intelligence (AI) and cloud infrastructure. Morgan Stanley analysts recently upgraded their price targets for both companies, citing strong, sustained demand from big tech firms investing heavily in AI initiatives.
Western Digital, a leader in data storage solutions, saw its shares climb over 9% to around $116 in recent trading, nearing an all-time high. Seagate Technology followed closely, with its stock up approximately 5% to $227, just a fraction below its recent record close. The gains reflect broader market optimism about the long-term prospects of data storage companies as enterprises and tech giants expand their AI capabilities.
Morgan Stanley’s analysts argue that the current upswing is just the beginning. They highlight that cloud infrastructure spending and the need for robust data retention to support AI applications are creating a "stronger for longer" environment for hard drive manufacturers. The bank raised its price target for Western Digital to $171, a significant jump from the previous $99, while elevating Seagate’s target to $265 from $168. These revisions suggest substantial upside potential, with Western Digital’s shares poised for a 60% increase from their last closing price and Seagate’s offering a 22% gain.
The surge in data storage stocks aligns with the broader tech sector’s focus on AI-driven innovation. As companies like Microsoft, Amazon, and Google invest billions into AI research and development, the demand for scalable, reliable storage solutions has intensified. Hard drives remain a critical component of this ecosystem, particularly for applications requiring high-capacity, cost-effective storage. Analysts note that Western Digital’s strategic positioning and recent discussions with management further bolster its appeal as a top pick in the sector.
For investors, the current landscape presents a compelling opportunity. The combination of AI adoption, cloud expansion, and growing data generation is likely to sustain demand for storage solutions. However, as with any market trend, risks such as supply chain fluctuations or shifts in technological preferences could impact performance. Nonetheless, the consensus among analysts like those at Morgan Stanley suggests that the momentum behind data storage stocks is far from over.
As the AI revolution accelerates, the role of data storage companies is evolving from mere providers of hardware to essential enablers of the digital future. With Wall Street’s confidence growing, the question for investors is not whether the sector will continue to thrive, but how quickly they can capitalize on its next phase of growth.