11:58 AM EST, 01/21/2025 (MT Newswires) -- Seagate Technology Holdings ( STX ) revenue in the fiscal quarter ending in June is poised to rebound on demand for hard disk drives after a cyclical drop, Morgan Stanley said Tuesday in a report.

The firm boosted Seagate ( STX ) to its hardware top pick amid "greater comfort in the HDD demand outlook amidst transitory near-term supply issues and still view Street gross margins as too conservative." the report said.

Recent industry checks showed HDD demand remains "robust," and pricing continues to increase on a quarterly basis, while artificial intelligence growth continues to buoy storage demand, Morgan Stanley said.

Demand trends, technology leadership and strong industry profitability may drive Seagate's ( STX ) positive earnings revisions and lead to "strong outperformance" in the next three to six months.

Morgan Stanley lowered its price target on Seagate ( STX ) to $129 from $133 and maintained its overweight rating on the company.

Seagate ( STX ) shares rose 4.1% in recent Tuesday trading.

Price: 101.71, Change: +4.04, Percent Change: +4.14