TLDR
- Seagate Technology reported Q2 adjusted earnings of $3.11 per share on revenue of $2.83 billion, beating analyst expectations of $2.84 per share on $2.74 billion in sales.
- The company guided Q3 adjusted earnings at $3.40 per share with revenue of $2.90 billion, surpassing Wall Street forecasts.
- Seagate stock jumped 3.6% in early trading while lifting peers Western Digital and SanDisk higher.
- AI data center demand is driving increased need for hard disk drives and storage solutions.
- Cantor Fitzgerald raised its price target on Seagate from $400 to $500, citing tight supply and improving margins.
Seagate Technology delivered a strong earnings report Wednesday morning that sent its stock climbing. The hard disk drive manufacturer posted adjusted earnings of $3.11 per share on revenue of $2.83 billion for its fiscal second quarter.
Analysts had expected earnings of $2.84 per share on sales of $2.74 billion. Revenue jumped 22% compared to the same period last year.
Seagate Technology Holdings plc, STX
The company’s stock rose 3.6% in early trading. Other memory sector stocks also climbed on the news.
Forward Guidance Beats Expectations
Seagate’s outlook for the current quarter impressed investors even more. The company expects adjusted earnings of $3.40 per share on revenue of $2.90 billion.
That forecast came in well ahead of analyst predictions. The guidance helped push shares higher Wednesday.
CEO Dave Mosley attributed the strong performance to AI-driven demand. “As AI applications amplify the creation and economic value of data, modern data centers increasingly need storage solutions that combine performance and cost-efficiency,” Mosley said.
The artificial intelligence boom continues to reshape data storage needs. Companies building AI data centers need massive amounts of storage capacity.
This demand is creating a favorable environment for hard drive manufacturers. Seagate is benefiting from tight supply conditions in the HDD market.
The memory sector has started 2026 strong. AI hyperscalers are driving sky-high demand for data storage solutions.
Western Digital and SanDisk also saw their stocks rise Wednesday. The entire sector is getting a lift from Seagate’s results.
Pricing dynamics are working in Seagate’s favor. Tight supply combined with strong demand has created pricing power.
The company’s gross margins came in sharply higher than expected. Favorable pricing and ongoing cost reductions are expanding margins.
This margin expansion is accelerating cash flow generation. The improving financial picture supports multiple capital allocation priorities.
Analyst Response and Price Target Increase
Cantor Fitzgerald analyst C.J. Muse raised his price target on Seagate. The new target sits at $500, up from $400.
Muse maintained his Overweight rating on the shares. He cited tight HDD supply and favorable pricing as key drivers.
The improving pricing environment and rising margins support a strengthening free cash flow outlook. This positions Seagate to pursue debt reduction, dividend growth, and share repurchases.
Cost reductions continue to accelerate margin expansion. The company is executing well on operational efficiency.
The S&P 500 climbed 0.3% Wednesday morning. A series of solid earnings reports helped reignite the AI rally across markets.
Seagate’s fiscal second quarter showed revenue of $2.83 billion, representing 22% year-over-year growth. The company posted adjusted earnings of $3.11 per share for the quarter.
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