Seagate stock is tracking toward its worst week since early March as the AI infrastructure rally faces a test. Shares of Western Digital also slid, extending recent losses. The declines come as investors reassess valuations ahead of Nvidia's highly anticipated earnings report.
The pullback in AI-related stocks has put pressure on the broader semiconductor and data storage sectors. Both Seagate and Western Digital have benefited from the AI boom, as demand for high-capacity storage grows alongside expanding data centers. But this week's sell-off suggests some profit-taking and caution.
According to Investor's Business Daily, the slide marks a significant reversal for the two storage giants. The article notes the stocks are now at levels not seen since early March, though it does not provide specific percentage declines. Volume has been heavy, indicating active selling by institutional investors.
Nvidia's earnings, due next week, could determine the near-term direction for AI-related stocks. If results disappoint, further weakness in names like Seagate and Western Digital may follow. Conversely, strong numbers might reignite the rally and pull the storage makers higher.
Some analysts argue the pullback is a healthy correction in an overheated sector, rather than the start of a longer downturn. They point to sustained demand for AI infrastructure as a long-term tailwind for storage companies.