Seagate: Capacity For Growth In 2023 - Upgrading To Buy
Summary
- We are moving Seagate to a buy as we believe the stock has hit its inflection point.
- We expect HDD industry demand-supply dynamics to improve this year; hence, we expect STX will outperform expectations in 2023.
- We believe STX provides a favorable risk-reward scenario even if the semi-space doesn’t rebound in 1H23. We expect STX to enjoy improved ASP and cloud customer demand for higher-capacity HDDs.
- We believe STX is not immune to macro headwinds, but still expect the company to gradually see HDD demand recover toward 2H23.
- We believe the downside has been factored into the stock for the most part. Hence, we recommend investors buy the stock at its current levels.
Tech Stock Pros is a team of three former technology sector engineers with a long history of investing in the tech sector.
They run Tech Contrarians, an investing group providing institutional-level company research to individual investors. Utilizing a live portfolio with quarterly updates, bi-weekly newsletters, and answering questions daily via chat, Tech Stock Pros aims to demystify investing in the technology sector. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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