Western Digital and Seagate Rebound After Toshiba Expansion Fears Dismissed

Shares of Western Digital and Seagate Technology rallied on Monday, rebounding from a selloff triggered by concerns over Toshiba’s plans to expand hard disk drive (HDD) manufacturing in the Philippines. Western Digital (NASDAQ:WDC) surged 7% to $442.44, while Seagate (NASDAQ:STX) climbed 5% to $891.76, outpacing broader tech gains. The recovery followed weekend research notes from Bernstein, Citi, and Morgan Stanley, which dismissed fears of oversupply, arguing that Toshiba’s expansion would not ease the tight market for HDDs.

Bernstein called the selloff "a storm in a teacup" and recommended buying both stocks, while Citi emphasized that the HDD industry is still under-shipping demand. Morgan Stanley noted that Toshiba lacks the advanced technology, such as heat-assisted magnetic recording, that Western Digital and Seagate possess. However, Goldman Sachs took a more cautious stance, favoring Seagate over Western Digital due to its supply discipline and technological progress.

Goldman Sachs rated Seagate as one of its tactical semiconductor ideas ahead of the third-quarter 2026 earnings, citing its competitive edge. In contrast, Western Digital received a Neutral rating, with Goldman Sachs expecting it to underperform Seagate. Despite this, Western Digital’s stock outperformed Seagate’s during the rally, suggesting traders were seeking relief in the harder-hit name.

The rebound in HDD stocks stood out against a nearly unchanged Roundhill Memory ETF (CBOE:DRAM), highlighting the sector-specific nature of the recovery. Investors will now watch for further developments on Toshiba’s expansion plans and whether Western Digital can maintain its momentum as earnings approach.