Seagate Technology Stock Soars with Optimistic Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy STX?
Source: Fool
- Strong Demand: Data centers account for 87% of Seagate's shipments in Q2 FY 2026, with robust storage demand leading to sold-out high-capacity HDDs, which is expected to drive continued growth for the company.
- Price Increases: The shortage of HDDs resulted in a 60% price increase for high-capacity drives between November 2025 and February 2026, while Gartner forecasts a 56% rise in data center system spending, further solidifying Seagate's market position.
- Earnings Expectations Rise: Seagate's non-GAAP earnings jumped 53% year-over-year to $3.11 per share in Q2 FY 2026, with projected annual earnings reaching $17.53 per share, exceeding the consensus growth estimate of 63%, indicating strong profitability.
- Stock Price Potential: With a current P/E ratio of 33, below the tech sector's 43, Seagate's stock could rise by 50% to $877 by the end of 2026 if earnings reach $17.53 per share, making it an attractive investment opportunity.
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Analyst Views on STX
Wall Street analysts forecast STX stock price to fall
18 Analyst Rating
14 Buy
3 Hold
1 Sell
Moderate Buy
Current: 643.300
Low
150.00
Averages
310.39
High
465.00
Current: 643.300
Low
150.00
Averages
310.39
High
465.00
About STX
Seagate Technology Holdings plc provides mass-data storage infrastructure solution. The Company’s principal products are hard disk drives, commonly referred to as disk drives, hard drives (HDDs). In addition to HDDs, the Company produces a range of data storage products, including solid state drives (SSDs), solid state hybrid drives, storage subsystems, as well as a scalable edge-to-cloud mass data platform. Its HDD products are designed for mass capacity storage and legacy markets. Mass capacity storage involves use cases, such as hyperscale data centers and public clouds, as well as emerging use cases. The Company’s HDD and SSD product portfolio includes Serial Advanced Technology Attachment, Serial Attached SCSI and Non-Volatile Memory Express based designs to support a variety of mass capacity and legacy applications. Its systems portfolio includes storage subsystems for enterprises, cloud service providers, scale-out storage servers and original equipment manufacturers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Seagate Technology Reports Strong Earnings, Shares Surge
- Revenue Surge: Seagate Technology reported a 44% year-over-year revenue increase to $3.1 billion for its fiscal third quarter ending April 3, highlighting the urgent demand for data storage solutions driven by AI infrastructure expansion, which significantly boosts the company's performance.
- Margin Improvement: The adjusted gross margin improved by over 10 percentage points to 47%, while the operating margin jumped 14 percentage points to 37.5%, indicating that the company successfully raised prices in a high-demand environment, thereby enhancing profitability.
- Net Income Soars: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, reflecting the company's strong financial performance in a rapidly growing market and further solidifying its market leadership.
- Optimistic Outlook: Seagate expects revenue of approximately $3.45 billion and adjusted earnings per share of $5.00 for the upcoming fiscal quarter, both exceeding Wall Street estimates, with the CEO stating that the company is entering a new era of structural growth as AI applications continue to drive sustained storage demand.
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- Margin Improvement: The company's adjusted gross margin rose by over 10 percentage points to 47%, while its operating margin jumped 14 percentage points to 37.5%, indicating that Seagate successfully raised prices in response to demand for high-capacity hard drives exceeding supply, significantly enhancing profitability.
- Net Income Surge: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, with this robust financial performance not only boosting investor confidence but also laying a solid foundation for future growth.
- Optimistic Future Outlook: Management anticipates fourth-quarter revenue of approximately $3.45 billion and adjusted earnings per share of $5.00, both exceeding Wall Street estimates, with CEO Dave Mosley stating that Seagate is entering a new era of structural growth as AI applications proliferate, sustaining storage demand.
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Seagate Technology Reports Strong Earnings, Stock Soars
- Significant Revenue Growth: Seagate Technology reported a 44% year-over-year revenue increase to $3.1 billion for its fiscal third quarter ending April 3, highlighting the urgent demand for data storage solutions driven by rapid AI infrastructure expansion, which significantly boosts the company's performance.
- Margin Improvement: The company's adjusted gross margin improved by over 10 percentage points to 47%, while its operating margin surged 14 percentage points to 37.5%, indicating that Seagate successfully raised prices in a high-demand environment, thereby enhancing profitability.
- Net Income Surge: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, with strong financial performance providing ample cash flow for future investments and debt repayment.
- Optimistic Outlook: Management anticipates revenue of approximately $3.45 billion and adjusted earnings per share of $5.00 for the next fiscal quarter, both exceeding Wall Street expectations, with the CEO stating that the company is entering a new era of structural growth as AI applications further drive storage demand.
See More
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- Shift in Tech Stock Dynamics: Jim Cramer highlighted that merely beating earnings is no longer sufficient for tech stocks to rally, as the market increasingly favors scarcity over scale, indicating a shift in investor preferences towards constrained supply.
- Meta's Revenue Growth: Despite reporting its fastest revenue growth in five years, Meta's shares fell in after-hours trading, reflecting investor concerns over the returns on its rising expenditures, which suggests a waning confidence in traditional tech giants.
- Beneficiaries of Supply Constraints: Companies like Seagate and Bloom Energy saw stock price increases due to tight supply linked to data center demand, with Cramer noting that their limited manufacturing capacity has made their products highly sought after by investors.
- Automotive Chip Shortage: NXP Semiconductors experienced a significant stock surge due to an unexpected shortage of automotive chips, with Cramer stating that as cars become more software-defined, NXP has become a must-have for investors, illustrating a renewed interest in older tech sectors.
See More
Seagate Technology Reports Strong Earnings, Shares Surge
- Revenue Surge: Seagate Technology reported a 44% year-over-year revenue increase to $3.1 billion for its fiscal third quarter ending April 3, highlighting the urgent demand for data storage solutions driven by AI infrastructure expansion, which significantly boosts the company's performance.
- Margin Improvement: The adjusted gross margin improved by over 10 percentage points to 47%, while the operating margin jumped 14 percentage points to 37.5%, indicating that the company successfully raised prices in a high-demand environment, thereby enhancing profitability.
- Net Income Soars: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, reflecting the company's strong financial performance in a rapidly growing market and further solidifying its market leadership.
- Optimistic Outlook: Seagate expects revenue of approximately $3.45 billion and adjusted earnings per share of $5.00 for the upcoming fiscal quarter, both exceeding Wall Street estimates, with the CEO stating that the company is entering a new era of structural growth as AI applications continue to drive sustained storage demand.
See More
Shift in Tech Stock Investment Preferences
- Earnings Growth Insufficient: Jim Cramer highlights that investors are now favoring companies facing supply shortages over those merely delivering earnings growth, indicating a market shift towards valuing scarcity.
- Mixed Reactions from Giants: On Wednesday, four mega-cap tech companies—Alphabet, Amazon, Meta, and Microsoft—reported earnings, with two experiencing declines in after-hours trading, reflecting a waning investor enthusiasm compared to the past.
- Opportunities in Supply Constraints: Companies like Seagate and NXP Semiconductors saw stock price increases due to supply limitations, with Cramer noting that Seagate's tight supply in data storage hardware indicates strong market demand for such products.
- Return of Old Tech: Cramer points out that despite Meta achieving its fastest revenue growth in five years, its stock fell due to investor skepticism about spending returns, suggesting that even traditional tech companies may perform better in the current market landscape.
See More
Seagate Technology Reports Strong Earnings, Shares Surge
- Significant Revenue Growth: Seagate Technology reported a 44% year-over-year revenue increase to $3.1 billion for its fiscal third quarter ending April 3, reflecting strong market demand amid the rapid expansion of artificial intelligence infrastructure, thereby reinforcing its leadership in the data storage sector.
- Margin Improvement: The company's adjusted gross margin rose by over 10 percentage points to 47%, while its operating margin jumped 14 percentage points to 37.5%, indicating that Seagate successfully raised prices in response to demand for high-capacity hard drives exceeding supply, significantly enhancing profitability.
- Net Income Surge: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, with this robust financial performance not only boosting investor confidence but also laying a solid foundation for future growth.
- Optimistic Future Outlook: Management anticipates fourth-quarter revenue of approximately $3.45 billion and adjusted earnings per share of $5.00, both exceeding Wall Street estimates, with CEO Dave Mosley stating that Seagate is entering a new era of structural growth as AI applications proliferate, sustaining storage demand.
See More
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- Oil Price Surge Impacts Market: WTI crude oil prices surged over 6% on Wednesday to a three-week high due to the US maintaining its naval blockade of Iran, raising inflation expectations and negatively impacting the stock market.
- Fed Policy Influence: The Federal Reserve kept the federal funds rate unchanged at 3.50% to 3.75% during its latest meeting, despite dissent from four members against easing bias, reflecting concerns over economic uncertainty that may dampen investor confidence.
- Strong Tech Stock Performance: The Nasdaq 100 index rose 0.58%, driven by strong earnings from NXP Semiconductors and Seagate Technology, with shares up 25% and over 10% respectively, indicating robust demand for AI infrastructure.
- Housing Data Exceeds Expectations: US March housing starts unexpectedly rose 10.8% to 1.502 million, significantly surpassing the expected decline to 1.380 million, demonstrating resilience in the housing market that could provide support for stocks.
See More
Seagate Technology Reports Strong Earnings, Stock Soars
- Significant Revenue Growth: Seagate Technology reported a 44% year-over-year revenue increase to $3.1 billion for its fiscal third quarter ending April 3, highlighting the urgent demand for data storage solutions driven by rapid AI infrastructure expansion, which significantly boosts the company's performance.
- Margin Improvement: The company's adjusted gross margin improved by over 10 percentage points to 47%, while its operating margin surged 14 percentage points to 37.5%, indicating that Seagate successfully raised prices in a high-demand environment, thereby enhancing profitability.
- Net Income Surge: Seagate's adjusted net income soared 129% to $934 million, translating to $4.10 per share, with strong financial performance providing ample cash flow for future investments and debt repayment.
- Optimistic Outlook: Management anticipates revenue of approximately $3.45 billion and adjusted earnings per share of $5.00 for the next fiscal quarter, both exceeding Wall Street expectations, with the CEO stating that the company is entering a new era of structural growth as AI applications further drive storage demand.
See More
New Trends in Tech Stock Investment
- Shift in Tech Stock Dynamics: Jim Cramer highlighted that merely beating earnings is no longer sufficient for tech stocks to rally, as the market increasingly favors scarcity over scale, indicating a shift in investor preferences towards constrained supply.
- Meta's Revenue Growth: Despite reporting its fastest revenue growth in five years, Meta's shares fell in after-hours trading, reflecting investor concerns over the returns on its rising expenditures, which suggests a waning confidence in traditional tech giants.
- Beneficiaries of Supply Constraints: Companies like Seagate and Bloom Energy saw stock price increases due to tight supply linked to data center demand, with Cramer noting that their limited manufacturing capacity has made their products highly sought after by investors.
- Automotive Chip Shortage: NXP Semiconductors experienced a significant stock surge due to an unexpected shortage of automotive chips, with Cramer stating that as cars become more software-defined, NXP has become a must-have for investors, illustrating a renewed interest in older tech sectors.
See More
