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The boom in AI has quietly reshaped which corners of tech Wall Street wants to own, and data storage has gained massive traction in the past year.

One top data center storage stock is Seagate (STX), which has returned 538% in the past year and 1,215.7% since June 2023. A major investment firm remains bullish on STX stock and recently raised its stock price target.

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When an AI system stores, moves, and recalls information, the bulk of it sits on hard disk drives in the data center. The "thinking" happens on chips, and long-term storage stays on Seagate's drives.

That split has fueled a long stretch of growth. At Bank of America's (BAC) 2026 Global Technology Conference on June 2, Seagate Chief Financial Officer Gianluca Romano said the company had logged 13 straight quarters of rising revenue and profit, with orders already in hand for the next four to five quarters.

The key driver is a technology called heat-assisted magnetic recording (HAMR). It lets Seagate pack far more storage into the same drive without adding factories or units.

Romano explained the math at the conference.

Seagate can maintain the same number of drives while increasing storage capacity by about 25% each year by adopting higher-capacity models.

Romano noted that swapping a 20-terabyte drive for a 40-terabyte one roughly doubles the revenue a data center earns from the same physical slot.

Demand, meanwhile, keeps climbing. Seagate Chief Executive Dr. Dave Mosley explained that the company is targeting mid-20 percent growth in storage capacity, calling it an enormous compound rate. He added that customer demand for 2027 and 2028 is running well above Seagate's own plan.

Mizuho raised its price target on Seagate stock to $1,090 from $875 on Monday while keeping an “Outperform” rating.

The firm now models fiscal 2027 (ending in June) earnings of $28.35 a share on $17.5 billion in revenue, both above Wall Street consensus.

In fiscal 2028, Mizuho forecasts revenue of $24.2 billion with adjusted earnings per share of $43.92.

The investment bank pegged the new target at roughly 38 times fiscal 2027 earnings and expects profit to jump 91%.

The firm credited Seagate's HAMR mix and strong cloud demand stretching into 2028.

A 91% jump in earnings per share (EPS) means Mizuho expects Seagate to nearly double its profit per share in a single fiscal year.

The "38 times earnings" figure is the price-to-earnings (P/E) multiple that Mizuho is willing to pay, a measure of how much investors are willing to pay per dollar of profit.

Wall Street estimates Seagate to increase revenue from $12 billion in fiscal 2026 to $33 billion in fiscal 2030. In this period, adjusted EPS is projected to expand from $14.88 per share to $80.17 per share. If STX stock is priced at 25 times forward earnings, it could deliver over 130% returns over the next four years.

Out of the 25 analysts covering STX stock, 21 recommend “Strong Buy”, one recommends “Moderate Buy”, and three recommend “Hold”. The average Seagate stock price target is $875.10, showing potential upside of 7.24%. And the Street-high price target of $1,150 means that STX stock could climb 40.9% in the upcoming 12 months.

Mizuho also expects Seagate to ramp up share buybacks, supported by a strong outlook for free cash flow.

Romano echoed that priority at the Bank of America conference, stating that Seagate has long returned most of its free cash flow to shareholders through dividends and buybacks, and it plans to keep doing so once it finishes paying down debt.

Romano said Seagate cut its debt from about $6 billion to under $4 billion, with only about $200 million of its convertible notes left to repurchase. Mosley said Seagate aims to return 75% of its cash to shareholders once the balance sheet is in shape.

For investors, the takeaway is straightforward. The trend Seagate keeps pointing to - more data and storage and steady price gains - is what Mizuho is betting on through 2028.

On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com