Western Digital Surges 16%, Seagate Up 9.4% on Monday as Morgan Stanley Flags HDD Supply Crunch Amid AI Buildout

According to Morgan Stanley analysts, Western Digital (WDC) surged 16% to $653.53 and Seagate (STX) rose 9.4% to $1,018.80 on Monday (June 16), as the largest daily gainers in the S&P 500. Analyst Erik Woodring raised Seagate's price target from $767 to $1,035 and Western Digital's from $488 to $650, citing expanding HDD (hard disk drive) supply shortages driven by AI inference and agentic AI workloads in data centers.

Woodring estimates current annual HDD demand growth at 40–50% while supply is rising only 30–35%, with the shortage expected to persist for two to three years. Recent inventory checks show original design manufacturers (ODM) hold just one to two weeks of WDC stock on hand. As NAND flash memory prices rise, HDDs have regained cost competitiveness for large-capacity storage needs in data centers, positioning both companies to raise prices in a disciplined manner.