Citi Raises Seagate and Western Digital Targets as AI Data Demand Supercharges Storage Pricing

Seagate Technology (NASDAQ:STX | STX Price Prediction) stock and Western Digital (NASDAQ:WDC) stock are both trading higher Monday morning after Citi raised its price targets on both names, maintaining Buy ratings on each. The move adds to a wave of bullish analyst activity that’s been building across the storage sector over the past two weeks.

Citi raised its Seagate target to $595 from $480 and lifted its Western Digital target to $405 from $335. Analyst Asiya Merchant cited continued solid supply and demand for storage, improving pricing dynamics, and AI demand accelerating the generation of unstructured data. That’s a thesis that’s been gaining serious traction on Wall Street, and today’s note gives it another institutional stamp of approval.

Both stocks have already had a remarkable run in 2026, so the question on every investor’s mind is whether there’s still room to run. Based on the new targets, Citi clearly thinks the answer is yes.

Citi Lifts Seagate Target to $595 on Storage Pricing Strength

Seagate shares closed at $503.15 on April 10 and are ticking higher again this morning. The stock is up 83% year-to-date, a stunning move driven by the same AI storage supercycle thesis Citi is now formally endorsing with a higher target.

The fundamental backdrop supports the bullishness. Seagate’s most recent quarter delivered revenue of $2.825 billion, up 21% year over year, with a record non-GAAP gross margin of 42%. Non-GAAP EPS came in at $3.11, beating the $2.84 estimate, and free cash flow surged to $607 million from $150 million in the prior year period.

The engine behind those numbers is Seagate’s HAMR-based Mozaic product line, which is ramping into hyperscale data centers hungry for high-capacity drives. CEO Dave Mosley highlighted AI applications amplifying data creation and exabyte-scale storage demand on the company’s most recent earnings call. It’s a structural demand shift, and Citi’s raised target reflects that reality.

Citi isn’t alone in its conviction. Morgan Stanley’s Erik Woodring named Seagate his top pick in IT hardware on April 6, raising his price target from $468 to $582 with an Overweight rating, citing strengthening HDD demand and potential supply shortages extending through 2028. Bernstein followed on April 9, lifting its target from $500 to $620 while maintaining an Outperform rating. The analyst community is clearly aligned on the direction here.

Western Digital’s $405 Target Reflects Pure-Play HDD Upside

Western Digital shares closed at $343.43 on April 10 and are up slightly this morning, trading around $344. The stock is up 99% year-to-date, making it one of the strongest performers in the entire technology sector so far in 2026.

Western Digital’s story represents a pure-play HDD company laser-focused on the mass-capacity storage market. Its most recent quarter showed revenue of $3.017 billion, a non-GAAP gross margin of 46%, and free cash flow of $653 million. Non-GAAP EPS of $2.13 beat the $1.93 estimate, and the company guided for Q3 revenue of approximately $3.2 billion with gross margins in the 47% to 48% range.

Western Digital CEO Irving Tan credited AI-driven demand and disciplined execution for the strong results. That combination of top-line momentum and expanding margins is exactly what Citi’s revised $405 target is pricing in. It’s worth noting that Citi’s new target sits above the prior consensus, signaling the firm sees more upside than the street has been modeling.

What to Watch

The shared thesis across every bullish note on these two names comes down to one word: unstructured data. AI doesn’t just consume compute. It generates and stores massive volumes of data that has to live somewhere, and high-capacity HDDs from Seagate and Western Digital are where it lands. Morgan Stanley projects HDD supply tightness could persist through 2028, which gives both companies meaningful pricing power for years, not quarters.

Watch for whether the momentum in both stocks holds through today’s close, particularly as the broader market digests the macro backdrop. Any additional analyst commentary on storage pricing or hyperscaler capex plans could serve as the next catalyst for either name.