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WESTERN DIGITAL, SEAGATE RIDE AI WAVE TO ALL-TIME HIGHS - IS A COOLDOWN COMING?

Western Digital WDC.O and Seagate Technology STX.O have rocketed more than 300% from April lows, hitting record highs on Thursday as investors bet on AI-driven storage demand.

The rally was invigorated in recent sessions as Wall Street brokerages hiked their price targets on the stocks, with Morgan Stanley last week saying 「demand for hard disk drives is inflecting higher driven by stronger cloud spend.」 Large-scale data center operators, or "hyperscalers" have a growing need for high-capacity drives to support AI workloads, which is driving a surge in nearline HDD demand.

But analysts forecast show the rally may have overshot. Western Digital’s median target price has jumped to $95 from $60 three months ago, but still implies a 27% drop from its last close. Seagate’s median target of $175 suggests a 32% downside, even after rising from $128.

Seagate reports quarterly results on Oct. 20, followed by Western Digital on Oct. 22.

(Medha Singh)

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