Seagate Technology Holdings Plc (NASDAQ:STX) shares surged in premarket trading Wednesday after the company reported third-quarter results that topped Wall Street expectations.
Earnings Snapshot
Seagate reported quarterly earnings of $4.10 per share, beating the Street estimate of $3.50, according to Benzinga Pro data.
Quarterly revenue totaled $3.11 billion, exceeding the analyst consensus estimate of $2.95 billion.
For the fourth quarter, the company expects revenue of $3.45 billion, plus or minus $100 million, implying roughly 41% year-over-year growth at the midpoint. Seagate guided for non-GAAP diluted earnings of $5.00 per share, plus or minus $0.20.
The company said its outlook assumes minimal impact from tariffs and geopolitical conditions based on current expectations.
Conference Call Key Takeaways
Seagate’s data center business accounted for 88% of total exabyte shipments and 80% of revenue, reflecting strong exposure to hyperscale and cloud demand.
Data center revenue rose 55% year over year to $2.5 billion, driven by demand from cloud providers and enterprise customers. Total shipments reached 199 exabytes, up 39% from a year earlier.
Demand for Mosaic HAMR-based platforms remained strong, with two major cloud customers qualifying Seagate’s 4-plus terabyte-per-disk products, signaling technology maturity. Nearline capacity is largely booked through 2027, providing visibility into future demand.
Seagate raised its long-term revenue growth outlook to at least 20% annually, citing technology advancements and sustained demand trends.
Management identified artificial intelligence as a structural driver of storage growth, fueled by increased data creation and retention.
The company expects adjusted operating margins to remain in the low-40% range, supported by pricing discipline and demand strength.
Seagate said it will continue investing in HAMR and Mosaic platform technologies to support long-term capacity expansion and margin improvement.
The company also expects free cash flow to improve through fiscal 2026 and beyond, driven by operational efficiencies and disciplined capital allocation.
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $517.00. Recent analyst moves include:
- B of A Securities: Buy (Raises Target to $700.00) (April 27)
- Barclays: Upgraded to Overweight (Raises Target to $625.00) (April 22)
- UBS: Neutral (Raises Target to $515.00) (April 21)
STX Price Action: Seagate Technology shares were up 16.92% at $677.00 during premarket trading on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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