5 Hidden Metrics Behind Seagate's AI-Fueled Rally

Core Insights - Seagate's shares increased by over 10% following a strong fiscal Q1 2026 earnings report, with revenue rising 21% year-on-year to $2.63 billion and adjusted EPS reaching $2.61, surpassing Wall Street expectations [1] Group 1: Operational Performance - Seagate delivered a record 182 exabytes of hard-drive capacity in the quarter ending October 3, 2025, with 159 exabytes from nearline drives, highlighting the importance of cloud exposure in revenue growth [3] - The average capacity per drive increased to 14.6 terabytes, reflecting a 26% year-on-year rise in nearline drive capacity, which supports AI and data-heavy workloads and contributes to margin expansion [4] - Seagate shipped over 1 million Mozaic HAMR drives during the September quarter, indicating a shift from proof-of-concept to commercial production [5] Group 2: Market Position and Future Outlook - Five major cloud service providers have approved Seagate's Mozaic 3+ HAMR platform, with additional qualifications expected to enhance supply visibility and support upgraded guidance [7] - Seagate's advancements in drive density, product qualification, and manufacturing capabilities suggest a pivotal moment, aligning technological progress with increasing AI-driven storage demand [8] - The current market enthusiasm for Seagate may indicate the beginning of a sustained structural uptrend, driven by next-generation HAMR drives and deeper cloud qualifications [9]