11:19 AM EDT, 05/28/2025 (MT Newswires) -- Seagate Technology Holdings ( STX ) is expected to see increased product supply, thanks to advancements in hard drive technology, BofA Securities said Wednesday in a report.

The report cited a shift to heat-assisted magnetic recording, which allows hard drives to store more data by using a tiny laser to heat the disk before writing information, packing more data into the same physical space. BofA also sees encouraging prospects for areal density, the amount of data that can be stored per square inch of a hard drive's surface.

Seagate's ( STX ) ability to improve areal density and shift toward HAMR technology will help boost profit without requiring additional manufacturing capacity, BofA said.

The industry has adopted a build-to-order approach, meaning companies produce hard drives based on demand rather than stockpiling inventory, and with a six to 12-month outlook, Seagate ( STX ) can anticipate changes in demand and adjust production, avoiding extra costs in slower periods, the report said.

BofA raised its price objective on Seagate Technology ( STX ) to $135 from $125 and maintained its buy rating.

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