Prediction: This Artificial Intelligence (AI) Stock Will Turn $1,000 Into $1,500 by the End of 2026
The synthetic intelligence (AI) infrastructure growth supercharged the shares of a number of corporations which have benefited from the rollout of this expertise in recent times, and information storage options supplier Seagate Technology (STX 2.82%) is one of them.
This AI stock’s worth has shot up a surprising 7x over the final yr. This surge was partly pushed by investor enthusiasm over sturdy demand for Seagate’s high-capacity arduous disk drives (HDDs) and solid-state drives (SSDs), that are utilized in information facilities. Importantly, the favorable tendencies driving Seagate’s strong progress are more likely to persist for the the rest of 2026 and past.
It will not be shocking to see this inventory head increased as the yr progresses. Let’s say you’ve $1,000 in investable money proper now, after assembly bills, paying off any costly loans, and saving for tough occasions. Putting that cash into Seagate may very well be a wise transfer. Let’s take a look at the explanation why.
Image supply: Getty Images
Strong demand and provide constraints shall be tailwinds for Seagate
Data facilities are the greatest prospects of Seagate’s storage options, accounting for 87% of its shipments in the second quarter of fiscal 2026 (which ended on Jan. 2, 2026). What’s value noting is that storage demand from information facilities is so sturdy that Seagate already bought out its high-capacity HDDs for 2026. Even higher, main cloud prospects are already lining as much as buy Seagate’s capability for 2027 and 2028.
Today’s Change
(-2.82%)$-16.83
Current Price
$579.03
Key Data Points
Market Cap
$130B
Day’s Range
$553.20 – $592.84
52wk Range
$81.22 – $607.89
Volume
4.4M
Avg Vol
4.1M
Gross Margin
38.65%
Dividend Yield
0.49%
The scarcity of HDDs led to a 60% worth improve for high-capacity storage drives between November 2025 and February 2026. SSD costs jumped much more aggressively. Market analysis agency Gartner anticipates a 56% bounce in spending on information middle methods this yr, a rise of round 4 proportion factors over final yr.
The acceleration in data center spending means that the favorable HDD pricing atmosphere is not going away anytime quickly. Seagate’s non-GAAP earnings jumped by 53% yr over yr in fiscal Q2 to $3.11 per share. The firm’s fiscal 2026 earnings steering of $3.40 per share factors to a stronger improve of 79% over the year-ago interval’s studying of $1.90 per share.
Seagate, due to this fact, appears nicely on its technique to exceeding the consensus earnings progress estimate of 63% for the present fiscal yr to $13.17 per share. Even higher, the HDD scarcity for the relaxation of the yr has put Seagate in a powerful place to barter favorable pricing phrases with its prospects. As a consequence, do not be shocked if the firm’s earnings progress for fiscal 2027 (which begins in July of this yr) outpaces the 58% bounce analysts expect.
The potential outperformance is the motive Seagate can ship wholesome positive aspects by the finish of the yr.
Stronger-than-expected earnings progress ought to translate into extra inventory worth upside
Seagate’s consensus earnings expectations have risen this yr, with the fiscal 2027 estimate being an particularly outstanding improve.
Data by YCharts.
It will not be shocking to see these estimates rise as the yr progresses, particularly given the current speedy improve in HDD costs. Seagate guided by $3.40 in earnings per share at the midpoint for its lately concluded fiscal Q3 2026 (which coincides with the first quarter of the calendar yr).
We have already famous that the year-over-year improve could be 79%. Assuming Seagate’s earnings improve by 70% yr over yr in the remaining three quarters of calendar 2026, its general earnings for the calendar yr would land at $17.53 per share.
Period | Projected EPS | Year-ago EPS | Estimated progress |
|---|---|---|---|
FY 2026 Q3 | $3.40 | $1.90 | 79% |
FY 2026 This autumn | $4.40 | $2.59 | 70% |
FY 2027 Q1 | $4.44 | $2.61 | 70% |
FY 2027 Q2 | $5.29 | $3.11 | 70% |
12-month whole | $17.53 | $10.21 | 72% |
Data supply: Seagate Technology quarterly earnings reviews. EPS = Earnings per share.
Seagate is buying and selling at 33 occasions ahead earnings. That’s a reduction to the US tech sector’s earnings a number of of 43. However, this tech inventory deserves to commerce at a premium, as it’s poised to extend its earnings at a a lot increased charge than the broader market. The S&P 500‘s earnings, as an example, are anticipated to extend by 18% this yr.
Assuming Seagate trades at 50 occasions earnings at the finish of 2026 and its earnings attain $17.53 per share in calendar 2026, its inventory worth might improve by 50% to $877. So an funding of $1,000 in Seagate inventory proper now may very well be value $1,500 by the finish of the yr, suggesting that buyers can nonetheless purchase this high-flying inventory even after the multibagger positive aspects it has clocked in the previous yr.