Morgan Stanley reaffirmed Seagate Technology as its top pick in U.S. IT hardware with confidence in the hard disk drive cycle and structurally stronger margins. The brokerage raised its price target to $138 from $134, with a bull-case valuation of $170.

“Recent industry & supply chain checks give us confidence the HDD upcycle has longevity as demand continues to outstrip supply and cloud spending remains robust,” analyst at Morgan Stanley said.

It expects Seagate to see revenue, margin, and earnings growth through 2025, aiding a stock re-rating.

Key upcoming catalysts include Seagate’s presentation at the Morgan Stanley TMT Conference on March 4, April earnings, and a May 22 Analyst Day, where it may introduce a long-term growth outlook exceeding current estimates.

MS noted that DeepSeek news from late last month had implications on memory players. “We don’t believe it changes the equation for data storage, and could in fact support more HDD storage demand over time,” analyst added.