Seagate and Western Digital are worried about supply problems as AI needs push them to make more products.

Oct 16, 2026, 10:38 AM ETMarketRead the original at Benzinga

Neutral

Strong AI storage demand and tight supply support Seagate, but Toshiba's planned capacity increase, cloud companies' funding gap, and higher borrowing costs could pressure prices and customer spending. These forces leave Seagate's outlook without a clear change.

STX · Seagate Technology Holdings Plc.

AI read · Neutral

The AI's read

AI data needs keep demand for high-capacity drives strong, and tight supply has helped push prices higher. But Toshiba plans to double drive production by 2027, which could pressure prices. The 5 largest cloud companies may spend $820 billion in 2026, above their $750 billion in combined cash from operations. Higher inflation could also raise borrowing costs. These facts pull in different directions, so the story does not clearly change Seagate's outlook.

WDC · Western Digital Corp.

AI read · Neutral

The connection

Strong AI storage demand and tight supply support Western Digital, but Toshiba's planned capacity increase, cloud companies' funding gap, and higher borrowing costs could pressure prices and customer spending. These forces leave Western Digital's outlook without a clear change.

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