With a net profit margin of 21.60%, Seagate Technology Holdings plc (NASDAQ:STX) is included among the 12 Most Profitable American Stocks to Buy in 2026.
Seagate Technology Holdings plc (NASDAQ:STX) is a leader in mass-capacity data storage. The company has delivered more than four billion terabytes of capacity over the past four decades.
On June 15, Morgan Stanley upped its price target on Seagate Technology Holdings plc (NASDAQ:STX) from $767 to $1,035, while keeping an ‘Overweight’ rating on the shares. The target boost indicates a slight upside of over 1% from the current levels.
According to Morgan Stanley, its recent Asian market checks over the last three weeks clearly indicate that the hard disk drive (HDD) cycle is lasting longer than previously projected. The firm believes that HDD shortages are likely to persist through at least 2028. The findings also indicate that HDD pricing is strengthening clearly and significantly.
Seagate Technology Holdings plc (NASDAQ:STX) is expecting its June quarter revenue to be around $3.45 billion, plus or minus $100 million, while its adjusted EPS is projected at $5, plus or minus $0.20. Meanwhile, the company is targeting an operating margin in the lower 40% range. Moreover, Seagate remains confident in increasing its annual revenue growth target from the low to mid-teens to a minimum of 20% over the next few years.
Sands Capital Management, LLC stated the following regarding Seagate Technology Holdings plc (NASDAQ:STX) in its Q1 2026 investor letter:
“We initiated positions in Seagate Technology Holdings plc (NASDAQ:STX) and Lam Research and believe both businesses will play a key role in this transition. As a provider of hard disk drives, we expect Seagate Technology to benefit from limited capacity and potential price increases for solid state memory, which we expect may exceed current expectations. The hard disk drive market is a duopoly with limited risk of Chinese competition and Seagate is the clear industry leader in both share and technology.
Seagate Technology is a global leader in mass-capacity data storage. The company has built its position over decades of innovation and industry consolidation, emerging as one of two scaled providers in the global storage market, with a focus on high-capacity nearline hard disk drives that serve cloud service providers and enterprise data centers. Its Mozaic platform uses heat assisted magnetic recording to increase storage density, enabling a significantly lower cost per byte than flash alternatives and reinforcing hard drives as the preferred solution for large-scale data storage. Demand for storage is rising rapidly, driven by AI-related workloads that generate and retain large volumes of data, including generative and agentic applications that require long-context processing. We believe this growth in data creation is likely to outpace near-term supply, creating a favorable industry backdrop. In our view, a constrained supply environment, combined with sustained demand, should support volume growth and stable to improving pricing, positioning Seagate to benefit from durable trends tied to cloud computing and AI-driven data expansion.”
While we acknowledge the risk and potential of STX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than STX and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 14 Best S&P 500 Stocks to Buy Now According to Analysts and 10 Most Profitable Energy Stocks to Buy Now
Disclosure: None. Follow Insider Monkey on Google News.
Hedge Fund Resource Center