Driven by the worldwide surge in constructing artificial intelligence infrastructure, Seagate Technology and Western Digital, as pivotal data storage providers, have witnessed a cumulative surge of over 200% in their stock prices in 2025, both hitting record-breaking highs. A research report from Morgan Stanley points out that the AI-fueled acceleration in cloud infrastructure spending (projected to hit a cumulative $3 trillion by 2028), accelerated investment in data-centric technologies, and a surge in demand for AI inference are collectively propelling enterprise-grade nearline hard drive shipments to achieve a compound annual growth rate of 21-22% over the next three years. Both firms have recently reported robust financial results: Western Digital posted revenue of $2.82 billion in the first quarter of fiscal year 2025 (a 27% year-on-year increase), with adjusted earnings per share reaching $1.78 (surpassing expectations by 12.9%) and gross margin improving to 43.9%. Meanwhile, Seagate Technology has also raised its quarterly outlook, forecasting significant revenue and profit growth. At the customer front, cloud giants like Amazon and Microsoft have inked long-term procurement deals extending through the first half of 2027 to secure storage capacity. In the technological race, Western Digital's UltraSMR high-capacity hard drives and Seagate's HAMR (Heat-Assisted Magnetic Recording) technology provide distinct competitive edges, with Seagate planning to unveil 40TB+ hard drives in the latter half of 2026. From an industry valuation standpoint, Morgan Stanley believes the HDD sector is shifting from cyclical to structural growth, with an 80% upside potential in current valuations. The target prices for the two companies have been revised upwards to $171 (Western Digital) and $265 (Seagate Technology), respectively.