Seagate(US:STX) ZACKS·2026-02-17 17:30Core Insights - Seagate Technology Holdings plc reported record financial performance for Q2 2026, with revenues of $2.83 billion, a 7% sequential increase and 22% year-over-year growth [1][10] Revenue Performance - Seagate shipped 190 exabytes in Q2, a 26% increase year-over-year, with the data center segment accounting for 87% of shipment volume [2] - Data center revenues reached $2.2 billion, representing 79% of total revenues, with a 5% sequential increase and 28% year-over-year growth [2][10] Demand and Capacity - Demand remains strong, particularly from cloud customers, with nearline capacity fully allocated through 2026 and visibility extending into 2027 and 2028 [3] - Average nearline capacity increased by 22% year-over-year to nearly 23TB, maintaining steady revenue per terabyte [3] Technology and Innovation - Seagate's Heat-Assisted Magnetic Recording (HAMR) technology is seen as crucial for AI and ML-driven demand for cost-efficient mass-capacity storage [4] - Quarterly HAMR shipments exceeded 1.5 million units, supporting a long-term roadmap toward 10TB-per-disk areal density [4] Future Outlook - For Q3, Seagate expects revenues of approximately $2.9 billion, indicating a 34% year-over-year improvement at the midpoint [5] - Non-GAAP operating margin is projected to increase to around 30% [5] Competitive Landscape - Seagate faces competition from Western Digital and Silicon Motion, with both companies reporting strong revenue growth driven by AI-led demand and long-term contracts [6][7][9] Stock Performance - Seagate's shares have increased by 321.1% over the past year, outperforming the Computer Integrated Systems industry's growth of 90.4% [11] - The forward price/earnings ratio for Seagate is 26.94X, higher than the industry's 16.65X [12] Earnings Estimates - The Zacks Consensus Estimate for Seagate's earnings for fiscal 2026 has significantly increased over the past 60 days [13] - Seagate currently holds a Zacks Rank 1 (Strong Buy) [14]