- Wells Fargo analyst Aaron Rakers maintained Seagate Technology Holdings PLC (NASDAQ:STX) with an Equal-Weight and reduced the price target from $110 to $90 (8.1% upside).
- Rakers maintained Western Digital Corp (NASDAQ:WDC) with an Overweight and decreased the price target from $80 to $70 (45.6% upside).
- Rakers reduced its estimates on Seagate and Western Digital ahead of their upcoming earnings releases.
- Also Read: Seagate, Western Digital Shares Lose Steam Post Rating Downgrade, Price Target Cut
- The revision reflected a decline in Seagate's nearline HDD capacity ship and a reduced other mass capacity ship estimate given VIA weakness.
- Rakers saw Western Digital recapture 100-200bps of capacity ship share in nearline HDDs due to less exposure to the China VIA segment vs. Seagate and industry checks.
- Rakers expected downward estimate pressure amid slower nearline HDD demand and anticipated softening in client SSDs (W. Digital).
- Rakers saw buoyant cloud-driven demand reflected via Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), Google's recent data center CAPEX commentary, Meta Platform Inc's (NASDAQ:FB) Capex, cloud demand indicators, AI infrastructure build-outs, server CPU cycle, etc.
- Price Action: WDC shares traded higher by 2.22% at $48.33 on the last check Tuesday. STX shares traded higher by 1.13% at $83.24.
