Wall Street sees Big Tech's AI spending as positive for semiconductor stocks

Seagate Technology received a buy rating and a $899.28 price target from 24/7 Wall St., implying 14.82% upside over the next 12 months at a 90% confidence level. The call follows a blowout fiscal Q4 report on July 28, 2026, in which Seagate posted revenue of $3.63 billion, up 48.49% year over year, and non-GAAP EPS of $5.71, beating expectations by 12.11%, while full-year FY26 free cash flow hit a record $3.105 billion, up 279.58%. Management now guides to annual revenue growth of a minimum of 20% over the next few years, up from prior mid-teens targets, and CEO Dave Mosley said nearline capacity is almost fully allocated through calendar 2027. Mosaic 4 HAMR drives deliver up to 44 terabytes per drive, and Mosaic 5 is targeting 50 terabytes with qualification shipments in late 2027. The stock trades at a forward P/E of 23, roughly in line with Western Digital's 21, while Micron's forward P/E of 6 highlights how much Seagate has already re-rated; the bear case lands at $685.64 on hyperscaler concentration risk.

IBM's Software business slowed in the second quarter of 2026, with revenues up 5% year over year to $7.8 billion but organic revenue growth flat, as weakness in the Transaction Processing business drove an 8% revenue decline there. The company attributed the shortfall to customers shifting capital spending toward servers, storage and memory to secure supply-constrained infrastructure ahead of anticipated price increases, which left several large software deals unclosed within the expected timeframe. Still, roughly 80% of annual Software revenues is recurring, and Red Hat remained a key growth engine, with Hybrid Cloud revenues up 11% and OpenShift ARR reaching $2.2 billion, while the Data business grew 19% year over year. The acquisitions of HashiCorp and Confluent strengthened IBM's automation, data and hybrid-cloud capabilities, and Software segment profit rose 9% to $2.5 billion with segment margin up 110 basis points to 32.2%. IBM faces competition from Microsoft, whose Productivity & Business Processes segment generated $37.8 billion in June-quarter revenues, up 14% year over year, and from Oracle, whose cloud revenues surged 47% in USD and 46% in cc to $9.9 billion even as its Software revenues fell 2% to $6.8 billion.

Nvidia CEO Jensen Huang confirmed at a Scotland tech gathering that the company's chip sales in 2027 are projected to roughly double from 2026, echoing management's August 26, 2026 earnings call guidance for about 70% revenue growth in fiscal 2028. The doubling is being driven by the Vera Rubin platform, which entered full production alongside continued Blackwell deployment and is expected to be the fastest product ramp in Nvidia's history, with per-gigawatt revenue opportunity rising to roughly $40 billion from $25 billion on Blackwell. Nvidia's supply obligations swelled to $279.0 billion, largely tied to memory procurement for Vera Rubin, while guarantee obligations for AI cloud partners are capped at $108.5 billion and financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR are expected to mobilize over $500 billion of third-party capital for AI infrastructure. Sovereign and enterprise AI is growing 100% a year, with sovereign AI revenue up 35% sequentially and more than tripling year over year, and neocloud partners expected to exit the year with eight gigawatts of installed capacity versus roughly three gigawatts at the end of 2025. Consensus EPS for the fiscal year ending January 2028 has climbed from $12.67 ninety days ago to $15.57 today, with 39 upward revisions in the past 30 days and zero cuts, on revenue now pegged at roughly $678 billion.