Seagate Technology Stock (STX) Falls 8% After CEO Pours Cold Water on Expansion Plans

The stock of high-flying Seagate Technology (STX) is down 8% after CEO Dave Mosley poured cold water on plans to expand the company's factories that make memory chips and data storage products.Claim 55% Off TipRanksForget margin or options. Here's how the pros trade STX Speaking at the JPMorgan (JPM) Global Technology, Media and Communications Conference, Mosley said that building new factories would "take too long." The CEO made the comment when asked whether Seagate plans to expand manufacturing capacity to meet soaring demand for memory chips that are in short supply globally due to demand from the artificial intelligence (AI) buildout. Mosley said investing heavily in new factories would set up the company with more capacity than it needs. He also stressed that Seagate Technology is focused on driving growth through technology transitions rather than adding new manufacturing facilities and additional capacity. The Bull Run in STX Stock "If we took the teams off and started building new factories or bringing up new machines that would just take too long, you end-up more capacity, if you will, but then you'd slow the rate of growth on that technology," said Mosley at the conference. The decline of STX stock on May 18 comes after a stampeding bull run in the shares. Even with the 8% decrease, Seagate Technology's stock is up 152% this year, placing it among the U.S. market's top performers. In the past 12 months, Seagate's share price has risen an astounding 564%. Is STX Stock a Buy? Seagate Technology's stock has a consensus Strong Buy rating among 17 analysts. That rating is based on 14 Buy and three Hold recommendations issued in the last three months. The average STX price target of $773.65 implies 7% upside from current levels.