In the frenzy surrounding artificial intelligence, investors have naturally gravitated toward household names in the memory chip space like Sandisk and Micron Technology. But sometimes, the biggest surprises come from overlooked corners of the market.
Over the past year, hard disk drive manufacturer Seagate Technology (STX) has quietly delivered a stunning 304% gain, far outpacing most semiconductor stocks during the same period. More notably, a growing number of analysts believe the rally is far from over—with some suggesting the stock still has the potential to double in 2026.
On Jan. 28, Seagate reported its fiscal 2026 second-quarter results for the three months ended Jan. 2, 2026. Revenue rose 21.5% year over year to $2.82 billion. But the real story was on the bottom line: earnings per share surged 53% to $3.11.
The growth is being fueled by the insatiable demand for data storage in the age of AI. Whether it’s training large language models or running inference applications, vast amounts of data must be stored and accessed quickly. Seagate’s high-capacity hard disk drives (HDDs) and solid-state drives (SSDs) are essential components of modern data center infrastructure.
During the company’s earnings call, management revealed that demand for high-capacity nearline drives is exceptionally strong. Seagate has already sold out its entire 2026 production capacity for these products and has begun accepting orders for the first half of 2027.
“We have long-term agreements in place with major cloud customers through calendar ’27. Additionally, multiple cloud customers are discussing their demand growth projections for calendar ’28, underscoring that supply assurance remains their highest priority,” CEO William Mosley told analysts.
Unlike the NAND flash market, where Sandisk and Micron operate amid cyclical swings, Seagate’s HDD business is experiencing a rare and sustained supply-demand imbalance. With AI data centers racing to secure storage capacity and production capacity expanding slowly, HDD prices have jumped approximately 50% this year alone.
The tightness in HDD supply has also pushed some data centers toward SSD alternatives—at a steep cost. SSDs are currently priced at roughly 16 times the level of HDDs, reflecting the acute shortage of storage solutions across the board.
Seagate projects that between 2024 and 2028, the HDD market will grow at a mid-teens compound annual growth rate, a significant acceleration from the low-teens pace seen in prior years. The company estimates its addressable market will expand from $13 billion in 2024 to $23 billion in 2028.
If the past year’s rally reflected an initial pricing-in of AI-driven storage demand, 2026 could be the year when earnings delivery takes center stage.
Analysts currently expect Seagate to earn $13.02 per share in the current fiscal year, representing 61% growth. With first-half fiscal 2026 earnings already at $5.72 per share, the company is on track to deliver another $7.30 in the second half. Looking ahead to fiscal 2027 (which begins in July), market expectations hover near $20 per share. Even on a conservative estimate, Seagate’s calendar year 2026 earnings could reach approximately $17.30 per share.
Applying the U.S. technology sector’s average price-to-earnings multiple of 41 yields a target price of $721—roughly 77% above current levels. Given the persistent supply tightness in storage markets, Seagate’s results could easily surpass expectations. If the market assigns a premium multiple to reflect sustained growth, a double from today’s price is well within reach.
While investors debate the cyclical turns at Sandisk and Micron, Seagate has quietly demonstrated its unique position in the AI infrastructure trade—backed by sold-out capacity and surging profitability. For those willing to look beyond the usual suspects, this unassuming storage maker just might be 2026’s biggest dark horse.
