The hard-drive trade got right back on track Monday as Wall Street analysts urged investors to buy the dip in Western Digital and Seagate Technology shares.

Each stock dropped 10% on Friday after Nikkei reported that their Japanese rival Toshiba plans to double its production capacity of drives used in artificial-intelligence data centers and triple its current 10% market share. Toshiba declined to comment.

But analysts have jumped to Western Digital and Seagate’s defense. They say Toshiba’s plans wouldn’t meaningfully change the industry’s overall supply scarcity.

“We’d be aggressive buyers of STX and WDC as Friday’s news created an opportunity, not a change in thesis,” Erik Woodring, an analyst at Morgan Stanley, wrote in a research note.

Seagate stock surged 5.2% to $896.65 on Monday, while Western Digital jumped 5.9% to $439.35

Crucially, hard-disk drive demand is anything but static right now. AI both requires and creates huge amounts of data, and demand for these drives has actually accelerated over the last couple of months, Woodring said.

Morgan Stanley reiterated Overweight ratings on both Seagate and Western Digital stock, with price targets of $1,187 and $676, respectively.

Ben Reitzes, head of technology research at Melius Research, also told investors to “buy the dip.” He writes in a research note that data centers’ insatiable demand for storage will absorb any new supply. In fact, the need for storage should continue to grow in the long run as robotics and physical AI systems start to take off, he added.

“Toshiba’s move is a demand signal dressed up as a supply threat,” Reitzes wrote, noting that some AI hyperscalers “are begging a third supplier to get in the game.”

Western Digital has surged 155% this year and 251% over the last 12 months. Seagate has performed even better, jumping 222% in 2026 and 266% in the last year.