What Happened?
A number of stocks fell in the afternoon session after a broad selloff swept through the semiconductor industry, sparked by concerns over the future of artificial intelligence spending and rising geopolitical risks.
The negative sentiment followed a report from The Wall Street Journal which revealed that the AI firm OpenAI had missed internal targets for both new users and revenue. This news raised investor fears that a key player in the AI space might pull back on its heavy spending on data center infrastructure, potentially reducing demand for chips. Compounding these worries were escalating tensions between the U.S. and China over AI technology and broader concerns about global supply chain disruptions. The selloff was not isolated, affecting numerous semiconductor and AI-related stocks as investors reacted to the sector-wide headwinds.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Memory Semiconductors company Seagate (NASDAQ: STX) fell 2.7%. Is now the time to buy Seagate? Access our full analysis report here, it’s free.
- Memory Semiconductors company Western Digital (NASDAQ: WDC) fell 2.2%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
Zooming In On Seagate (STX)
Seagate’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 2.8% on the news that Barclays upgraded the stock to Overweight from Equalweight and raised its price target to $625 from $425.
The firm cited the duopoly structure of the industry, a commitment by the company not to add capacity, and significant pricing upside as reasons for the change. The analyst expected hard disk drive pricing to see gains in the high teens over the next two years. Barclays also saw specific upside as Seagate transitioned to 40TB drives, a product generation that should carry better economics. Other analysts shared a similar positive outlook, with both UBS and BofA Securities also raising their price targets on the stock.
Seagate is up 103% since the beginning of the year, and at $584.31 per share, it is trading close to its 52-week high of $595.86 from April 2026. Investors who bought $1,000 worth of Seagate’s shares 5 years ago would now be looking at an investment worth $6,135.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a $437 billion giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
