Seagate Technology PLC's stock fell 5.18% during intraday trading on Tuesday, marking a significant decline for the memory storage company.

The sell-off comes despite a recent UBS analysis that revised its outlook for Seagate, anticipating similar pricing benefits to those seen at Western Digital that could drive gross margins above 50%. The bank expects Seagate's average selling price per terabyte to increase 6% in fiscal 2026 and 9% in fiscal 2027, with peak margins potentially reaching 57-58%.

However, market concerns appear focused on the cyclical nature of the memory industry. Analysis suggests investors may be overlooking historical patterns where memory stocks experience sharp corrections after significant rallies. Seagate has been among the top performers in the S&P 500 with gains of 180-280% over the past six months, raising concerns about potential overvaluation and the risk of repeating past cyclical reversals seen in 2022 and earlier periods.