STX

The recent selloff of both stocks has been “well overdone,” analysts say.

More bearish headlines for the AI trade hit Western Digital (WDC) and Seagate (STX) after Wells Fargo slashed price targets for both. Diane King Hall says the lower price targets don't necessarily indicate a heel turn from the firms' bullish stance.

STX's 44TB Mozaic 4 drives are fueling gross margin expansion as cloud demand, higher storage density and improved cost efficiency boost profitability prospects.

The AI trade is having a rough week.

Seagate just shed more than 14% in a month after a rival made a move that rattled the entire hard-drive sector, yet the company's own numbers tell a completely different story about where demand is heading.

In Q3 2026, the Portfolio returned 4.46% (net of fees) compared to 0.92% for the Index. Top relative contributors to the Portfolio's performance included ServiceNow, Shopify and Microsoft. By contrast, the largest relative detractors in the quarter were Nvidia, Apple (not owned) and Lam Research.

Seagate is positioned as a beneficiary of the AI buildout, leveraging its advanced storage solutions for large-scale data needs. HAMR technology enables STX to offer higher-capacity drives, reducing required units and operational costs for data centers, with 44TB drives available and 100TB planned by 2032. The company delivered strong financials: FY2026 sales up 34% to $12.2B, adjusted operating margins at 36.5%, and free cash flow 3.8x prior year, supporting a Buy rating.

Seagate shares cratered 15% in a single week even as analysts refused to cut a single earnings estimate and the stock still sits nearly 52% below where the average price target says it should be.

SK Hynix (NASDAQ:SKHY) stock is down 6% to $153.04 in early trading as a Seoul selloff carries into U.S. markets. It's been a rough ride as SK Hynix's Seoul-listed shares posted a fifth consecutive decline.

Memory and storage shares are slipping as news of a Chinese rival's chip work spreads across the group. SanDisk (NASDAQ:SNDK | SNDK Price Prediction) stock is down 6% to $1,484.21 in early action.