Investing.com – Seagate stock (NASDAQ:STX) stock rose 1% Monday following an upgrade by UBS (NYSE:UBS), which sees the stock at $105, an upside of 15% from its current level of $91.31.
Analyst Timothy Arcuri now rates the stock a buy from neutral earlier.
Seagate is a data storage company. The analyst said that the hard drive sector is now at a structural inflection point as it is giving rise to more stable supply-demand dynamics along with expanding cross-cycle margins. Seagate stands to gain from the changes taking place in data storage requirements of customers, according to him.
Arcuri said the massive growth in data storage requirements has led customers to strike longer-term supply-pricing relationships while recent storage-driven blockchains have brought down channel inventory.
He expects new technologies like HAMR to keep alternatives like NAND away for many years to come. If Seagate can stick to strong discipline on the operating expenditure side, it will be able to sustain margins well above prior peak levels, Arcuri said.