Seagate's Mozaic 3+ Ramp Gains Momentum Across Global CSPs

Core Insights - Seagate Technology Holdings plc (STX) is experiencing growth with its next-generation Heat-Assisted Magnetic Recording (HAMR)-based Mozaic 3+ platform, driven by demand from global cloud service providers (CSPs) [1][2] - The transition to high-capacity, energy-efficient drives is yielding positive technological and financial results, as highlighted in the latest earnings call [1][4] Company Performance - Seagate's Mozaic 3+ products represent a significant engineering achievement, providing advantages in areal density and total cost of ownership (TCO) [2] - The company has qualified three major CSPs for Mozaic 3+, with additional qualifications underway, leading to increased shipments to cloud customers [2] - Nearline shipments surged 52% year-over-year to 137 exabytes in the June quarter, with record sales for 24TB and 28TB PMR platforms [3] - Non-GAAP gross margins reached a record 37.9% and operating margins were 26.2% in the fourth quarter, reflecting the margin-accretive nature of the Mozaic ramp [4][10] Future Outlook - Seagate plans to qualify its Mozaic 4+ drives, which will have capacities up to 44TB, in the first half of fiscal 2026, further solidifying its leadership in high-capacity storage [5] - The combination of Mozaic 3+ and 4+ is expected to help global CSPs manage exponential data growth efficiently and sustainably [5] Competitive Landscape - Seagate faces competition from HDD and SSD manufacturers like Western Digital Corporation (WDC) and Pure Storage, which are also focusing on high-capacity storage solutions [6] - WDC reported strong demand for its high-capacity drives, shipping over 1.7 million units of 26TB and 32TB drives in the fourth quarter of fiscal 2025 [7] - Pure Storage achieved 13% year-over-year revenue growth in the second quarter of fiscal 2026, driven by its all-flash, software-driven data storage solutions [8] Stock Performance and Valuation - Seagate's shares have increased by 123.5% over the past year, outperforming the Zacks Computer Integrated Systems industry's growth of 53.6% [11] - The forward price/earnings ratio for STX is 21.76X, which is lower than the industry's 24.09X [12] - The Zacks Consensus Estimate for STX's earnings for fiscal 2026 has been revised up by 2.04% to $10.51 over the past 60 days [13]