# Seagate and Western Digital Shares Drop as AI Supply Expansion and Funding Concerns Emerge

- URL: https://stocks.freetheai.org/news/seagate-and-western-digital-shares-drop-as-ai-supply-expansion-and-funding-8c8260
- Published: 2026-10-16T14:30:48Z
- Category: technology; sentiment: bearish; impact: medium
- Symbols: [NASDAQ:STX](https://stocks.freetheai.org/symbols/NASDAQ-STX), [NASDAQ:WDC](https://stocks.freetheai.org/symbols/NASDAQ-WDC)
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Shares of Seagate Technology Holdings PLC (NASDAQ:STX) and Western Digital Corporation (NASDAQ:WDC) dropped sharply as part of a broader technology sector retreat, giving back part of their strong gains from earlier in the year. STX fell 5.60% to $652.10, while WDC declined 4.82% to $339.30.

Investors are reassessing stock valuations amid rising concerns over future storage supply expansion and potential financing burdens for artificial intelligence infrastructure. Planned capacity increases across the industry, including goals to double hard-disk drive manufacturing for data centers by fiscal 2027, have sparked worries about pricing pressure. At the same time, massive projected capital spending by major hyperscalers—estimated at $820 billion in 2026—could create a funding gap as spending outpaces operating cash flow, further complicated by elevated inflation and high interest rates.

Despite the recent pullback, both storage producers maintain strong momentum for 2026, remaining up between 110% and 150% year-to-date. Investors will watch whether sustained data generation from AI inference workloads and agentic applications can keep supply tight enough to preserve current pricing levels.

## Key points

- Seagate Technology Holdings PLC (NASDAQ:STX) dropped 5.60% and Western Digital Corporation (NASDAQ:WDC) fell 4.82% amid a general technology sector retreat.
- Concerns over future storage capacity increases, including plans to double hard-disk drive production by fiscal 2027, are creating worries about pricing pressure.
- Projections show cloud provider capital expenditures reaching $820 billion in 2026, exceeding cash flow and raising concerns over AI infrastructure funding costs.
- Both storage makers maintain substantial gains for 2026, trading roughly 110% to 150% higher for the year due to robust AI-driven storage demand.

## Questions and answers

### Why are Seagate and Western Digital shares falling?

Shares are falling due to investor concerns over future hard-disk drive supply growth, high stock valuations, and rising financing risks for massive cloud provider capital expenditures in AI infrastructure.

### How much have Seagate and Western Digital stocks gained in 2026?

Even after the recent pullback, both Seagate Technology and Western Digital remain up roughly 110% to 150% in 2026, driven by high demand for data center storage.

### What AI spending trends are affecting storage manufacturers?

Cloud providers are projected to spend $820 billion on AI capital investments in 2026, which may outpace cash flow and create funding gaps as interest rates stay high.