TLDR
- Seagate shares fell about 9% to 11% on Friday after a report on Toshiba’s expansion plans.
- Western Digital shares dropped 6% to 7% on the same news.
- Toshiba plans to invest 60 billion yen, about $400 million, to double its hard drive output by fiscal 2027.
- The expansion targets growing demand for storage from AI data centers.
- Toshiba currently holds about 10% of the hard drive market and aims for a 30% share.
Seagate Technology and Western Digital shares dropped sharply on Friday. The decline followed a report from Nikkei about Toshiba’s plans to grow its hard drive business.
Toshiba plans to invest roughly 60 billion yen, or about $400 million. The goal is to double its hard drive production capacity by fiscal 2027.
Seagate shares fell between 9% and 11% depending on the report. Western Digital shares dropped between 6% and 7%.
Seagate Technology Holdings plc, STX
SanDisk, which also has ties to the data storage market, fell about 1% following the news.
What Toshiba Plans To Do
The expansion will center on Toshiba’s factory in the Philippines. The investment is meant to help the company meet rising demand from AI data centers.
Hard drives are used heavily by data centers that store information for artificial intelligence systems. Demand for this kind of storage has grown quickly over the past year.
The hard drive market is dominated by three companies. Those are Seagate, Western Digital and Toshiba.
Toshiba currently holds just over 10% of the market based on production capacity. The company has set a medium-term target of reaching a 30% share.
Why Investors Reacted Strongly
Both stocks had posted large gains this year before Friday’s drop. Seagate shares had risen roughly 240% in 2026 prior to the decline.
Western Digital shares had climbed about 170% over the same period. Those gains came largely from investor excitement about AI related storage demand.
The sharp run-up left both stocks sensitive to news that could affect future supply and pricing. A bigger Toshiba would mean more competition for Seagate and Western Digital.
More competition could also mean more supply entering the market. That raises the possibility of lower prices for hard drives going forward.
Seagate’s stock price on Friday was $945.57 per share. According to GuruFocus, the company’s calculated fair value sits at $194.40, which the firm says points to an overvaluation of about 386%.
Seagate’s price to earnings ratio stands at 68.15, compared with a five year median of 21.99. Insiders at Seagate sold shares worth $379,105,261 over the past three months.
Fourteen investment gurus currently hold positions in Seagate. Eleven of them added to their stakes in recent quarters, while four reduced their holdings.
Seagate has a market capitalization of about $215 billion. The company is one of the largest makers of hard disk drives in the world, with a focus on high capacity storage for cloud data centers.
The company has also developed heat assisted magnetic recording technology. This allows for higher data density and larger drive capacity.
Investors are now watching to see how Toshiba’s expansion plans affect pricing and supply across the hard drive industry in the months ahead.
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