
Seagate Stock To $85?
Question: How would you respond if you owned Seagate (NASDAQ: STX) and its value plummeted by 60% or more in the upcoming months?
While this may seem extreme, it is not without precedent. Seagate's stock has experienced such severe declines previously, and based on its current valuation, history might repeat itself.
Up to this point in 2025, Seagate has achieved an impressive 65% return year-to-date, significantly exceeding the S&P 500's 5% increase. This rise has been driven by structural improvements in the company and a timely shift towards next-gen technologies like HAMR (Heat Assisted Magnetic Recording). Seagate is currently benefiting from a upswing in the data-storage market, which is being bolstered by the increasing demand for generative AI and cloud infrastructure.
However, behind the AI enthusiasm and operational improvements lies a more cautionary narrative. Separately see, What's Next For Nike Stock?
Here's the point: The main takeaway is that during a downturn, Seagate stock could suffer considerable losses. Data from 2020 shows that STX stock lost around 35% of its value within just a few quarters, experiencing a peak-to-trough drop of about 58% during the 2022 inflation crisis, underperforming significantly compared to the S&P 500. This raises the question: Could the stock see a sell-off and potentially fall to $85 if a similar scenario were to occur? As a rule, individual stocks tend to be more volatile than diversified portfolios. Consequently, if you seek growth with decreased volatility, you might want to investigate the High-Quality portfolio, which has outperformed the S&P 500 and yielded returns over 91% since its launch.
Why Is It Relevant Now?
Seagate produces high-capacity HDDs (hard disk drives)—essential infrastructure for storing the immense datasets necessary for training and deploying large language models (LLMs). While SSDs (solid-state drives) are the go-to choice for fast-access storage, HDDs remain dominant in cold storage and hyperscale cloud archives—key applications for companies such as Microsoft, Meta, and Amazon.
Seagate introduced its Mozaic 3+ platform last year, which achieves 3 TB per platter through HAMR technology and incorporates it into its Exos 30 TB+ drives, which have already begun shipping to hyperscale cloud clients. At its June 2025 investor conference, Seagate announced that engineering samples of 40 TB HAMR drives (10×4 TB platters) have already been delivered, with mass production anticipated in the first half of FY 2026. The company intends to launch Mozaic 4+ with 40 TB+ capacity in 2026, followed by Mozaic 5+ providing 50 TB+ drives by 2028, and is aiming for 100 TB HDDs by 2030 as part of its larger HAMR roadmap. While this technological advancement positions Seagate for long-term growth, it also introduces execution risks if demand does not scale as expected.
Seagate forecasts Q4 adjusted EPS (June fiscal year) to be between $2.20 and $2.60, with revenue expected between $2.25–$2.55 billion. Consensus is predicting 38% revenue growth in FY 2025 and 13% in FY 2026. Nevertheless, even solid growth expectations cannot safeguard the stock from macroeconomic shocks, valuation declines, or operational setbacks. With very little margin for error, any misstep could lead to a steep correction.
How resilient is STX stock during a downturn?
STX stock has performed worse than the benchmark S&P 500 index during several recent downturns. While investors remain hopeful for a soft landing for the U.S. economy, how severe could it get if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes.
• STX stock decreased 58.2% from a high of $116.02 on 4 January 2022 to $48.49 on 3 November 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 27 May 2025
• Since then, the stock has risen to a high of $141.44 on 29 June 2025
• STX stock fell 35.6% from a high of $63.23 on 24 January 2020 to $40.73 on 20 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 4 December 2020
• STX stock dropped 89.1% from a high of $28.60 on 2 November 2007 to $3.11 on 23 January 2009, compared to a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 18 April 2012
Valuation
Currently, Seagate trades at 18x consensus 2025 earnings, significantly above its three-year average of only 5x. Its price-to-sales ratio has escalated to 3x, rising from 1.2x in FY 2022. Even its forward P/S of 3x surpasses the three-year average of 2.8x. In comparison, Western Digital (NASDAQ: WDC), a direct competitor, typically trades around 1x P/S during market downturns. Investor confidence is evidently reflected in the stock's elevated valuation—but with greater height comes a steeper potential fall. The average analyst price target of $125 suggests an 11% downside, even without factoring in a market correction.
Considering the wider economic uncertainties, ask yourself this: Do you plan to hold onto your Seagate stock now, or will you panic and sell if it starts to drop to $100, $90, or even lower? Hanging onto a declining stock is never an easy task. Trefis partners with Empirical Asset Management—an investment firm in the Boston area—whose asset allocation strategies produced positive returns during the 2008-09 period when the S&P lost over 40%. Empirical has integrated the Trefis HQ Portfolio into its asset allocation framework to offer clients better returns and less risk compared to the benchmark index—a smoother journey, as evidenced in HQ Portfolio performance metrics.
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Key Points The S&P 500 is seeing a surprising turnaround from the pervasive bearish sentiment that plagued the stock market earlier this year. Record highs are more common than investors might think. Buying an S&P 500 index fund only on days when the index hit a record high has historically yielded better returns than buying on any random day. 10 stocks we like better than S&P 500 Index › The S&P 500 (SNPINDEX: ^GSPC) has rocketed through five record highs in five days as of Friday, July 25. That strong upward momentum stands out in stark contrast to the pervasive bearish sentiment that plagued the stock market earlier this year. Is it smart to buy stocks with the S&P 500 roaring by record highs? Historical data gives a shocking answer. Record highs in the stock market are relatively common The S&P 500 is one of several major stock market indexes in the United States, but it is generally considered the best benchmark for the overall U.S. market due to its breadth. The index includes 500 large-cap companies that cover more than 80% of domestic equities by market capitalization. The S&P 500 hits all-time highs more frequently than investors may realize. The index has historically closed at a record high on one in 15 trading days, which is approximately 7% of the time, according to JPMorgan Chase. Moreover, the index often keeps climbing (or at least holding its level) with little to no backtracking. If we define "market floor" as incidents when the S&P 500 never declines more than 5% following a high, then nearly one in three record highs since 1988 have been market floors. In other words, about 30% of the time, the S&P 500 never fell more than 5% after hitting a high. The stock market tends to perform better following record highs Many investors get nervous when the stock market reaches an all-time high. The little voice in the back of your head may tell you to stop buying stocks, or even to sell existing positions. However, history says that this instinct is more likely to backfire than to prevent losses. Goldman Sachs analysts recently explained: "Contrary to conventional wisdom, investing in the S&P 500 exclusively on days when the market hit an all-time high has historically outperformed investing on any given day, producing stronger returns over the next 1, 3, and 5 years." The chart below expands on that information. It compares the average forward return in the S&P 500 when money is invested (1) unconditionally on any given day, and (2) exclusively on days when the index reached a record high. Time Period S&P Forward Return (From Any Given Day) S&P 500 Forward Return (From Record Highs) 6 Months 6% 6% 1 Year 12% 13% 2 Years 25% 29% 3 Years 40% 46% 5 Years 75% 81% Data source: JPMorgan Chase. Forward returns include dividend payments. Data collected between January 1988 and December 2024. The data shown above comes from JPMorgan Chase. It verifies Goldman's conjecture that an S&P 500 index fund would have generated better returns had money only been invested at all-time highs, rather than on any random day. In short, investors have no reason to fear record highs in the S&P 500. Quite the opposite, in fact. History says those days are good opportunities to add money to the stock market, no matter how counterintuitive it may seem. However, I would be remiss not to add this disclaimer: Historical data is never a guarantee of future returns, because every situation is different. In this case, the S&P 500 currently trades at 22.2 times forward earnings, a meaningful premium to the 10-year average of 18.4 times forward earnings, according to FactSet Research. The economy also has yet to feel the full effect of President Donald Trump's tariffs, which introduces downside risk. Indeed, the S&P 500 has a median year-end target price of 6,300 among 17 Wall Street analysts, which implies about 1% downside from its current level of 6,378. That does not mean investors should avoid the market. Rather, they should err on the side of caution by focusing solely on high-conviction ideas. Should you invest $1,000 in S&P 500 Index right now? Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,942!* Now, it's worth noting Stock Advisor's total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FactSet Research Systems, Goldman Sachs Group, and JPMorgan Chase. The Motley Fool has a disclosure policy. Should You Really Buy Stocks as the S&P 500 Roars by Record Highs? History Gives a Shocking Answer. was originally published by The Motley Fool 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤