Seagate Technology's Rise in AI Infrastructure Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy STX?
Source: Fool
- Significant Revenue Growth: Seagate Technology reported a 21.5% year-over-year revenue increase to $2.82 billion in Q2 of fiscal 2026, demonstrating strong performance in the data storage market, particularly driven by rising demand from AI applications.
- Enhanced Profitability: The company's earnings per share surged by 53% to $3.11, indicating effective cost management and profitability enhancement in a high-demand environment, which further boosts investor confidence.
- Strong Market Demand: Seagate has sold out its high-capacity nearline drives for 2026 and is experiencing robust order demand for the first half of 2027, reflecting the urgent need for storage solutions in AI data centers, which has driven up HDD and SSD prices.
- Optimistic Future Outlook: The addressable revenue opportunity for Seagate is expected to nearly double from $13 billion in 2024 to $23 billion by 2028, highlighting the company's long-term growth potential amid accelerated AI data center construction.
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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: 421.850
Low
150.00
Averages
310.39
High
465.00
Current: 421.850
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.
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Seagate Technology's Rise in AI Infrastructure Market
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- Enhanced Profitability: The company's earnings per share surged by 53% to $3.11, indicating effective cost management and profitability enhancement in a high-demand environment, which further boosts investor confidence.
- Strong Market Demand: Seagate has sold out its high-capacity nearline drives for 2026 and is experiencing robust order demand for the first half of 2027, reflecting the urgent need for storage solutions in AI data centers, which has driven up HDD and SSD prices.
- Optimistic Future Outlook: The addressable revenue opportunity for Seagate is expected to nearly double from $13 billion in 2024 to $23 billion by 2028, highlighting the company's long-term growth potential amid accelerated AI data center construction.
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- Nvidia Earnings Impact: Nvidia reported Q4 revenue of $62.3 billion, exceeding expectations, yet its stock dropped over 5% due to uncertainties regarding the Chinese market, reflecting investor concerns about an overheated AI economy that could affect related chipmakers' performance.
- Labor Market Signals: Initial jobless claims in the US rose by 4,000 to 212,000, lower than the expected 216,000, indicating resilience in the labor market, which may provide support for the stock market, especially amid potential interest rate cuts by the Fed.
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See More
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- Significant Revenue Growth: Seagate Technology reported a 21.5% year-over-year revenue increase to $2.82 billion in Q2 of fiscal 2026, demonstrating strong performance in the data storage market, particularly driven by rising demand from AI applications.
- Enhanced Profitability: The company's earnings per share surged by 53% to $3.11, indicating effective cost management and profitability enhancement in a high-demand environment, which further boosts investor confidence.
- Strong Market Demand: Seagate has sold out its high-capacity nearline drives for 2026 and is experiencing robust order demand for the first half of 2027, reflecting the urgent need for storage solutions in AI data centers, which has driven up HDD and SSD prices.
- Optimistic Future Outlook: The addressable revenue opportunity for Seagate is expected to nearly double from $13 billion in 2024 to $23 billion by 2028, highlighting the company's long-term growth potential amid accelerated AI data center construction.
See More
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- Nvidia Earnings Impact: Despite Nvidia reporting Q4 revenue of $62.3 billion, surpassing the consensus of $60.36 billion, its stock declined over 4% due to concerns regarding the Chinese market, reflecting investor doubts about demand durability.
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- Geopolitical Risks Intensify: Ongoing nuclear talks between the US and Iran have heightened geopolitical risks, with President Trump threatening military action against Iran, which has further impacted investor sentiment and market stability.
See More
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- Support from Job Data: Initial jobless claims in the U.S. rose by 4,000 to 212,000, which was better than the expected 216,000, indicating labor market strength and potentially providing some support for the stock market amidst mixed signals.
- Geopolitical Risks: As nuclear talks between the U.S. and Iran progress, President Trump has threatened limited military action against Iran, heightening market uncertainty, although easing geopolitical tensions have provided some temporary relief to stocks.
See More
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- Stock Market Trends: Stock futures were declining on Thursday, indicating a downturn in the market.
- Nvidia's Earnings Impact: Nvidia's strong fourth-quarter earnings report was not enough to maintain the recent rebound in the tech sector.
See More
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- AI Companies Drive Market: The statement from AI startup Anthropic PBC alleviated concerns about AI disruption, and Nvidia's Q4 revenue is projected to hit $65.91 billion, further fueling optimism about demand for AI processors among investors.
- Economic Data Impact: US MBA mortgage applications rose by 0.4%, with the average 30-year fixed mortgage rate falling to 6.09%, a nearly 3.5-year low, indicating a potential recovery in buyer confidence that could stimulate the housing market.
- International Market Rally: Overseas stock markets generally rose, with the Euro Stoxx 50 reaching a new high, indicating global investor optimism about economic recovery, which further supports the upward trend in US stocks.
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