Key Stats for Seagate Stock
- Pre-Market Price change for Seagate stock: 10.5%
- $STX Share Price as of Jan. 27: $372
- 52-Week High: $384
- $STX Stock Price Target: $356
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What Happened?
Seagate (STX) stock jumped over 10% in pre-market after the hard drive maker delivered blowout fiscal second-quarter results that crushed Wall Street expectations.
The company posted adjusted earnings of $3.11 per share on revenue of $2.83 billion, easily beating analyst estimates of $2.84 per share on $2.76 billion in sales.
The results weren’t just a beat—they were record-breaking.
- Seagate set new company highs for exabyte shipments, gross margin, operating margin, and earnings per share in the December quarter.
- Gross margin expanded to 42.2%, up from 40.1% the prior quarter, while operating margin hit nearly 32%.
CEO Dave Mosley credited the strong performance to “sustained demand growth for our high-capacity nearline drives across global cloud data centers.”
The company shipped 190 exabytes in the quarter, up 26% year-over-year, while keeping overall unit shipments relatively flat. That mix shift toward higher-capacity drives is driving the margin expansion.
Seagate stock also benefited from strong guidance.
- For the current quarter, the company expects revenue of $2.9 billion at the midpoint, representing 34% year-over-year growth.
- Management guided to earnings of $3.40 per share, well ahead of consensus.
- Even better, CFO Gianluca Romano said the company expects “sequential improvement to both the top and bottom line throughout calendar 2026.”
The guidance reflects exceptional demand dynamics. Seagate’s nearline capacity is fully allocated through all of 2026, and the company expects to start taking orders for the first half of 2027 soon.
Multiple cloud customers are already discussing demand projections for 2028, underscoring that supply assurance remains their top priority.
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What the Market Is Telling Us About STX Stock
The massive rally in Seagate stock shows investors are increasingly confident in the company’s positioning within the AI infrastructure buildout.
Data storage demand is exploding as AI applications require persistent access to massive amounts of historical data for training and inference.
Management highlighted that platforms like YouTube now see 20 million video uploads daily, up from just two million three years ago. And that doesn’t yet include the surge expected from AI-driven video generation applications.
Seagate is also benefiting from the rise of “agentic AI,” which relies on large volumes of historical data for planning and decision-making.
Seagate stock is particularly well-positioned through its HAMR (Heat-Assisted Magnetic Recording) technology roadmap.
- The company shipped over 1.5 million HAMR units in the December quarter and has now qualified all major U.S. cloud service providers on its Mozaic 3 platform.
- Average cloud nearline drive capacity reached nearly 26 terabytes, with HAMR drives running successfully in production environments.
The company is already ramping its next-generation Mozaic 4 product, with 4 terabytes per disk, later this quarter.
Seagate’s areal density roadmap extends to 10 terabytes per disk by early next decade, giving it a clear technology advantage and what management calls a “durable competitive moat.”
Perhaps most impressive is how Seagate stock investors are viewing the pricing environment.
- Revenue per terabyte has remained stable despite capacity increases, reflecting successful pricing discipline in a supply-constrained market.
- Management suggested pricing could move “flat to slightly up” as long-term agreements renew, a significant change from the industry’s historical double-digit annual price declines.
With nearline capacity sold out through 2026, improving margins from HAMR adoption, and strong cash generation enabling debt reduction and shareholder returns, Seagate stock looks positioned to sustain momentum as the AI data storage buildout continues.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
