7 Best Data Storage Stocks To Buy Now

4. Seagate Technology (NASDAQ:STX)  

Upside Potential: 21.87%  

Average Analyst Price Estimate: $117.34

Seagate Technology (NASDAQ:STX) is a global leader in data storage solutions. The company designs and manufactures a broad range of hard disk drives (HDDs), solid-state drives (SSDs) external storage devices, and network-attached storage drives which are used in computers, laptops, and mass-capacity data centers. The SSD market is valued at $65.47 billion in 2024 and is anticipated to grow to USD 147.01 billion by 2029, with a CAGR of 17.56% (according to estimates by Mordor Intelligence). Seagate Technology (NASDAQ:STX) is well-positioned for success as the global SSD market expands.

For the three months ended on June 28, Seagate Technology (NASDAQ:STX) reported that its revenue increased 18% year over year to $1.88 billion, beating analysts’ forecast of $1.85 billion. Earnings increased by 23% due to the increase in gross margins and operating margins. The company reported a gross margin of 31.8%, a notable improvement from 22.7% compared to the same quarter in the previous year. Seagate Technology (NASDAQ:STX) is experiencing strong demand from the global cloud market due to the growth of AI-related technologies, particularly generative AI.

Seagate Technology’s (NASDAQ:STX) cost-effective and scalable storage solutions are expected to remain in high demand, further boosting cash generation. The company increased its total cash position by 78% from $786 million to $1.4 billion, year over year, and reduced its debt, from $5.8 billion a year ago to $5.7 billion. While Seagate Technology’s (NASDAQ:STX) total liabilities still exceed total assets, the company is projected to grow at a fast pace, due to the cloud and AI sectors.

The company’s next-generation Heat-Assisted Magnetic Recording (HAMR) technology is also viewed as a significant breakthrough in the data storage market. This technology enables higher data density, reduces energy consumption, and increases disk capacity. Management anticipates that the launch of HAMR products in fiscal year 2025 could initiate a new spending cycle for customers seeking upgrades. Analysts expect that the company will increase its earnings by 136.84% this year. As a result, Seagate Technology (NASDAQ:STX) offers a compelling investment opportunity. The stock is trading at $96.28 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $117.34, which represents a 21.87% upside potential from its current level.