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Imagine looking at your portfolio after a year when two popular technology stocks have run circles around the S&P 500.

Seagate (STX), best known for hard drives, has gained nearly 142% year to date. Micron (MU), which has blown up due to its AI memory chips, has seen its shares skyrocket by about 240%. Both profited from the tremendous amount of data needed to power AI.

But the celebration has become a lot more complicated.

Seagate has tanked by over 26% in the past month, while Micron has slid roughly 10% as investors question whether the memory and storage boom can continue to deliver extraordinary profits.

Bank of America sees a strong opportunity in the uncertainty.

In an October 28 report shared with me, the bank reiterated its price target for Seagate stock, implying around 80% upside from its most recent closing price. Meanwhile, Micron trades at a much more attractive price-to-earnings multiple based on next year’s projected earnings.

Bank of America sees Seagate rising despite Micron’s lower projected earnings multiple.Bloomberg / Getty Images

Bank of America sees 80% upside for Seagate despite stock selloff

Bank of America analyst Wamsi Mohan (a 5-star analyst rated by Tipranks) sees a massive buying opportunity in a memory stock that investors have been punishing of late.

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In his October 28 report, shared with me, Mohan reaffirmed a Buy rating on Seagate Technology and set a $1,200 price target, implying nearly 80% upside from the October 27 close, following another earnings stunner.

Seagate’s fiscal Q1 sales surged 61% to $4.23 billion. At the same time, adjusted earnings climbed to $7.68 a share from $2.61 a year earlier, while free cash flow reached a record $1.5 billion.

However, those results didn’t move the needle for the stock. Investors were spooked by the company shipping 220 exabytes of hard-drive capacity, including 198 exabytes of nearline storage used by large data centers, a figure that was less than expected and raises concerns that what has seemed a relentless AI storage boom could potentially be losing momentum.

Mohan sees a different explanation.

Seagate is transitioning to higher-capacity drives using heat-assisted magnetic recording, or HAMR, temporarily disrupting shipments. Management expects volumes to improve in the December quarter. More telling, BofA says nearline production is largely allocated into 2028, while customer visibility stretches beyond 2030.

With storage demand outpacing available supply, Seagate has room to raise prices.

Overall, Mohan forecasts fiscal 2027 revenue of $19.3 billion, up 58%, and adjusted earnings of $37.42 per share, up roughly 140%. He also expects free cash flow to more than double to $6.84 billion.

Moreover, Mohan projects gross margins rising from 46.1% in fiscal 2026 to 61.4% in 2027, despite elevated input costs.

Those are impressive estimates, but for investors, Micron stock has been the more popular trade, and compared with Seagate, its stock looks remarkably cheap on next year’s earnings.

Why Micron stock looks cheaper despite its massive AI rally

Seagate’s projected growth is hard to miss, but Micron offers investors a different way to profit from the same AI boom, and its pricing setup raises an interesting question.

As of October 27, Seagate trades at approximately 17.8 times Bank of America’s projected fiscal 2027 earnings. On the flip side, Micron is trading at just 5.3 times Wall Street’s consensus earnings estimate for fiscal 2027, underscoring a substantial valuation gap.

To be clear, BofA is bullish on both companies. Analyst Vivek Arya (another 5-star rated analyst), in a note shared with me, recently reaffirmed his Buy rating and $1,550 price target for Micron, implying 67% upside compared with nearly 80% for Seagate.

That said, part of the answer to why Micron’s cheaper lies in how expensive it is to run its business.

Micron spent approximately $27.37 billion on capital investments in fiscal 2026, equivalent to 20.6% of revenue. Seagate’s corresponding figure was just $569 million, or 4.7%.

Building advanced memory chips requires enormous investments in manufacturing equipment. Seagate, meanwhile, can benefit from higher hard-drive prices and capacity improvements without the same capital intensity.

That helps explain BofA’s expectation that Seagate’s free cash flow could more than double in fiscal 2027. But Micron’s lower earnings multiple is likely to reflect investors’ concerns that the current unusually strong memory cycle won’t last once additional manufacturing capacity arrives.

A cheap-looking stock isn’t necessarily undervalued if its earnings are near a cyclical peak.

Seagate has greater upside to BofA’s target, while Micron trades at a lower projected earnings multiple. The deciding factor may be which company’s profits hold up better when AI spending eventually slows.

What Seagate and Micron investors should watch in 2027

The next year will test whether investors are witnessing a lasting change in storage economics or another boom that fades when supply catches up.

For Seagate, the evidence will come from shipments. Its transition to higher-capacity HAMR drives needs to lift exabytes sold, while contracted orders through 2028 must become revenue without sacrificing the stronger pricing and gross margins BofA expects.

Micron faces a different test. Strong DRAM and high-bandwidth memory prices must withstand new industry capacity, while cash flow must justify the billions spent on factory expansions.

There’s also a hidden assumption behind Seagate’s $1,200 target.

BofA applies a 16x multiple to its projected calendar 2028 earnings of $75.07 per share. That’s twice Seagate’s historical median multiple of eight times. At that older valuation, the same earnings would support a share price near $601, not $1,200. 

That helps frame the choice. Seagate offers relatively capital-light storage growth; Micron offers high-performance memory exposure at a lower forward multiple. For both, the question isn’t how cheap shares look against booming earnings. It’s how much of those earnings will endure.

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For employees who have grown accustomed to working from home or following a hybrid schedule, returning to the office five days a week can mean major changes to their daily routines.

And for thousands of workers at the newly merged entertainment giant Skydance, the change will come sooner than expected. The company, formed after Paramount completed its $110 billion acquisition of Warner Bros. Discovery earlier this month, is adopting a mandatory five-day in-office policy across its operations.

Skydance is also offering eligible employees voluntary buyouts, giving some workers who do not want to make the transition an opportunity to leave with severance.

The changes were outlined in an internal email from Skydance CEO David Ellison and co-CEO Ynon Kreiz on Oct. 26, first shared on X by journalist Scott Nover.

The move comes as Skydance begins integrating thousands of employees across Paramount, Warner Bros., HBO, CNN, CBS, and other businesses while pursuing billions of dollars in cost savings.

Skydance adopts strict 5-day office policy

The new policy expands a requirement already introduced at Paramount to the broader Skydance workforce.

Paramount employees assigned to offices were previously required to work in person five days a week, while Warner Bros. Discovery employees generally followed a three-day office schedule.

In their memo, Ellison and Kreiz defended the policy, arguing that employees working together in person strengthens collaboration, creativity, and the company’s culture.

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“We believe in-person collaboration is vital to our culture and to the success of our business,” the executives wrote.

They acknowledged that the change could disrupt employees’ established routines.

Skydance plans to implement the requirement in phases by location, rather than setting a single companywide start date. Employees will receive advance notice and support from managers during the transition, according to the memo.

The company has not publicly provided a detailed implementation schedule or clarified whether exceptions will be available.

What Skydance employees can expect from the buyout offer

In addition to the office mandate, Skydance is introducing a one-time voluntary buyout program for qualifying employees.

Eligible workers will receive individual communications outlining their severance terms and the deadline for making a decision.

According to an Oct. 26 Business Insider report, which reviewed a separate HR email, the standard package offers two weeks of severance pay for every year of employment at Paramount or Warner Bros. Discovery.

Some employees may receive different packages, depending on their circumstances. Workers who receive an offer must decide whether to accept it by Nov. 8, 2026, at 11 p.m. EST.

The HR communication described the program as voluntary and said that no additional buyout offers are planned. Employees who do not respond by the deadline will be considered to have declined the offer.

Skydance has not disclosed how many employees qualify for the program or how many departures it expects.

Skydance previously saw 600 workers accept buyouts

This is not the first time Skydance has paired stricter attendance requirements with an employee exit program.

Following the 2025 Paramount-Skydance merger, the company announced a phased return-to-office policy beginning in January 2026.

Employees in New York and Los Angeles at the vice-president level and below were offered voluntary severance if they were unwilling or unable to return to full-time work.

Approximately 600 employees accepted the offer, according to Paramount’s November 2025 SEC-filed shareholder letter.

The company separately eliminated approximately 1,000 positions in October 2025 as part of its restructuring.

Now, after acquiring Warner Bros. Discovery on Oct. 6, Skydance faces another round of workforce integration. In its official merger announcement, the company outlined a goal of generating at least $6 billion in annual run-rate savings within three years.

Executives have said much of the savings will come from areas outside labor, including technology, procurement and real estate, although additional layoffs are also expected.

The merger is already bringing changes for customers. As I previously reported, the combined company plans to eventually bring HBO Max and Paramount+ together as part of its streaming strategy.

Now with the November deadline approaching, Skydance’s latest policy could lead to another wave of employee departures before full workforce integration is complete.

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Landstar System (LSTR) shares tumbled about 17% on Wednesday, October 28, after the freight company missed Wall Street’s third-quarter profit forecast, even as revenue jumped 25%.

Earnings came in at $1.42 a share, well short of the $1.67 analysts expected. The culprit was insurance and claims, which cost $55.3 million, up from $33 million a year earlier.

For investors who own the stock for its steady dividend and buybacks, the selloff stings after a strong run in freight rates. Management says the market is tightening in carriers’ favor, which makes the profit hit look like a bumpy patch rather than a broken story.

How Landstar makes money

Landstar is an asset-light freight company. It moves truckloads for shippers using a network of independent contractors and agents rather than owning a large fleet. That model keeps costs lean and lets profits swing with freight demand.

Revenue from trucking was $1.407 billion in the quarter, up 29%, with van, flatbed-style and power-only freight all growing.

The company ended the quarter with about $351 million in cash and has repurchased about $64 million of stock this year. It pays a $0.44 quarterly dividend, next due Dec. 8.

Shares closed Tuesday at $168.78 before falling after the report. Before this move, Landstar’s market value was around $5.6 billion.

Landstar shares fell as higher insurance and claims costs dented third quarter earnings results.Jon Tetzlaff / Getty Images

Insurance and claims hold back Landstar profits

Third-quarter revenue reached $1.512 billion, up 25.4%, and operating income more than doubled to $65.5 million. Earnings of $1.42 a share compared with $0.56 a year earlier, which included a 66-cent impairment charge.

The problem was cost and margin.

Gross margin slipped to 8.4% from 9.2%. Insurance and claims jumped by $22.3 million, including about $13 million in adverse reserve adjustments and about $8 million to settle two accident claims.

“The highly elevated insurance and claim cost quarter is primarily attributable to: one, approximately $13 million or $0.29 per share of unfavorable actuarial adjustments to insurance and claims reserves as compared to the last actual review conducted as of the fourth quarter of 2025. And two, approximately $8 million or $0.18 per share, resulting from the settlement of two claims during the 2026 third quarter,” said CEO Frank Lonegro on the earnings call.

“It’s no secret — the truck transportation industry has been under attack of late by an incredibly aggressive plaintiff bar, emboldened by the prospect of nuclear verdicts and the Montgomery decision,’ added Lonegro.

In May, the Supreme Court ruled that lawsuits can target logistics companies. Previously, they were viewed as insulated against suits tied to accidents caused by the truckers they hire by the Federal Aviation Administration Authorization Act (FAAAA) of 1994.

Since the ruling has passed, insurance costs have risen alongside claims risk.

Management called the $8 million nonrecurring, but the higher reserves will be carried forward. The CFO suggested that the midpoint of the $35 million to $55 million quarterly range is more realistic.

On the positive side, truck revenue per load rose about 25%, loads rose about 3%, and Landstar added 165 net contractor trucks, its best quarter since 2021.

The company gave no formal guidance. The CEO said freight conditions keep improving, and described the market as shifting toward carriers after nearly four years favoring shippers.

What to watch next at Landstar

On the earnings conference call, analysts from Evercore, JPMorgan and Barclays pressed management on how much of the insurance charge will recur, while others, including Wells Fargo, TD Cowen and Stifel, asked about contractor growth.

Wolfe, UBS and Goldman Sachs asked whether rate strength lasts into 2027. Management said October revenue per load was about 29% above last year.

Truist lowered its Landstar stock price target to $160 from $175 and maintained a hold rating. JP Morgan lowered its target to $172 from $181 and kept its neutral rating.

The key for investors is whether insurance costs settle near the middle of the range, with October’s rate strength carrying through December and into Q4 results in early 2027.

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