By Britney Nguyen
Seagate says prices could go higher for its storage products as supply remains tight due to AI
Seagate's stock was up more than 15% on Wednesday.
Memory stocks were seeing a further boost on Wednesday, as upbeat commentary from two industry players suggested that booming demand for storage products could deliver financial benefits over an extended period.
Seagate (STX) reported earnings on Tuesday afternoon, with management saying that the price per terabyte of storage could either stay flat or rise due to artificial-intelligence-driven demand for storage solutions in data centers. That talk stood out to Evercore ISI analyst Amit Daryanani.
Meanwhile, Citi's Asiya Merchant flagged that Seagate has customers considering locking in 2028 agreements to secure access to a scarce commodity.
In Daryanani's view, Seagate is positioned to benefit from ongoing AI demand, as the tight supply-and-demand environment gives it more pricing power for its higher-capacity storage offerings. Daryanani is also optimistic about Seagate's leadership with its Heat-Assisted Magnetic Recording, or HAMR, technology, which allows it to make products with higher data density.
Seagate CEO Dave Mosley said in a statement that the company's strong December quarter reflected &#34;the durability of data-center demand&#34; and the ramp up of its HAMR-based products.
See more: Micron's stock is surging as the company looks to cash in on a 'desperate' market
Daryanani said a 22% increase in average nearline capacity per hard disk drive to 23 terabytes and a rise in capacity of Seagate's cloud nearline storage to 26 terabytes show the company's shift to offering more higher-capacity products, which also cost more for customers. Nearline storage is used for data that is not actively used, but that needs to be accessed quickly.
He also noted management's commentary on nearline capacity being fully allocated for the year, with visibility into demand for these products until 2028. That supports &#34;a constructive supply-demand environment&#34; that will drive both higher sales growth and better pricing, Daryanani said in a Tuesday note.
Seagate's stock was up more than 15% in Wednesday morning action. Western Digital's stock (WDC) was up nearly 8%, Sandisk's stock (SNDK) was up more than 7% and Micron Technology's stock (MU) was up about 4%.
&#34;Just when you thought you were at max volume on the amplifier and could not turn it up any higher&#34; the latest news and earnings in the semiconductor sector have made it so &#34;more buyers come rushing in,&#34; Mizuho trading-desk analyst Jordan Klein said in a note to clients.
Cantor Fitzgerald analyst C.J. Muse said Seagate's pricing increases for its hard disk drives, along with higher prices for its HAMR products as well as cost reductions, are helping make the company more profitable. And Seagate's free cash flow &#34;is only gaining momentum,&#34; Muse said in a Tuesday note.
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Additionally, South Korean memory-chip leader SK Hynix (KR:000660) said in its Wednesday morning earnings report that it is planning for a &#34;considerable increase&#34; in capital expenditures after seeing a 90% jump in profit and 66% increase in revenue in the fourth quarter. The company intends to boost its spending amid signals that it sees the rosy demand environment sustaining.
As AI workloads shift to inference, or the process of running AI models after training, memory and storage have become more crucial to data centers. Context windows, or the amount of data an AI model can process at one time, are getting longer, requiring more memory components to support a model's &#34;working memory&#34; for more complex responses.
SK Hynix is also a leader in high-bandwidth memory, alongside Samsung Electronics (KR:005930) and Micron, and the company emphasized its role in providing Nvidia (NVDA) with HBM3E for its Blackwell AI platform. The company also plans to support the upcoming Rubin platform with its next-generation HBM4.
Read also: ASML bookings blow past estimates as SK Hynix plans capital-expenditure boost
-Britney Nguyen
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(END) Dow Jones Newswires
01-28-26 1014ET

<p>Micron and other chip stocks are experiencing significant gains following positive comments from industry leaders. Seagate's stock surged over 15% after announcing potential price increases for storage products due to tight supply driven by AI demand. Analysts predict ongoing benefits for Seagate, particularly with its advanced HAMR technology. Other memory stocks, including Western Digital and Sandisk, also saw increases. SK Hynix reported a 90% profit jump and plans to increase capital expenditures, indicating strong demand for memory components in AI applications.</p>

- Seagate's stock surged over 15% amidst strong demand for high-capacity storage driven by AI.  
- Management indicated prices per terabyte may rise due to supply constraints, with customers considering long-term agreements to secure storage.  
- Analysts note that Seagate's advancements in HAMR technology and fully allocated nearline storage capacity until 2028 bolster its profitability and market position.

Micron and other chip stocks are seeing a big boost after these comments