KryptonResearch14
Oct 3, 5:00 PM
$STX $WDC
Friday's verdict on the Toshiba headline: the market sold first, then the analysts defended.
Seagate fell ~12% and Western Digital ~11%, the day's biggest large-cap losers. The trigger: Nikkei reported Toshiba will invest 60 billion yen to double its HDD capacity for AI data centers by fiscal 2027, targeting 30% capacity share vs roughly 11% now.
The sell side pushed back. Morgan Stanley, Rosenblatt, and Citi all kept positive ratings: the supply-demand gap through 2028 still looks wider than Toshiba's planned addition. Rosenblatt's honest read: the real risk is the 2029-2031 contract book, not near-term pricing.
Citi added the physical constraint: Toshiba does not make its own media and heads, so outside suppliers would have to ramp too. That caps how many exabytes reach the market.
After Friday, STX is still up ~208% this year and WDC ~141%. Non-GAAP gross margins: 52.7% and 54.4%.
The fight was about how long the scarcity premium lasts.
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