The AI boom has a storage problem, and Wall Street may be underestimating how long it lasts.
Morgan Stanley says HDD spot prices are running at $0.04–$0.07 per GB, while the market appears to be pricing in a peak in the storage cycle by FY2028.
Here’s what stands out:
~400 EB supply shortfall projected across the HDD industry in CY2027–2028.
Seagate ($STX): Price target of $1,200; December-quarter EPS forecast of $9.54.
Western Digital ($WDC): Price target of $643; December-quarter EPS forecast of $5.25.
Morgan Stanley estimates its EPS forecasts are 12% above consensus for STX and 10% above consensus for WDC.
AI gets the headlines for GPUs, but data centers also need somewhere to store all that generated data. If HDD supply stays tight, storage makers could benefit longer than the market expects. The big question is whether demand holds up and supply catches up before those bullish assumptions become reality.
Everyone is buying the AI brain. Someone still has to build the memory closet.
Will HDD makers remain major beneficiaries of the AI boom, or is the market already pricing in too much future growth?
Morgan Stanley says HDD spot prices are running at $0.04–$0.07 per GB, while the market appears to be pricing in a peak in the storage cycle by FY2028.
Here’s what stands out:
~400 EB supply shortfall projected across the HDD industry in CY2027–2028.
Seagate ($STX): Price target of $1,200; December-quarter EPS forecast of $9.54.
Western Digital ($WDC): Price target of $643; December-quarter EPS forecast of $5.25.
Morgan Stanley estimates its EPS forecasts are 12% above consensus for STX and 10% above consensus for WDC.
AI gets the headlines for GPUs, but data centers also need somewhere to store all that generated data. If HDD supply stays tight, storage makers could benefit longer than the market expects. The big question is whether demand holds up and supply catches up before those bullish assumptions become reality.
Everyone is buying the AI brain. Someone still has to build the memory closet.
Will HDD makers remain major beneficiaries of the AI boom, or is the market already pricing in too much future growth?