Core Insights - The demand for storage space is increasing due to the artificial intelligence boom, benefiting hard drive manufacturers like Seagate and Western Digital [3] Company Performance - Western Digital reported Q4 revenue of $2.61 billion, a 30% year-over-year increase, with diluted earnings per share (EPS) of $0.67 and free cash flow of $675 million [4][9] - Seagate's Q4 revenue was $2.44 billion, also reflecting a 30% year-over-year growth, with diluted EPS of $2.24 and free cash flow of $425 million [6][9] - Seagate plans to resume share repurchases, indicating confidence in future performance [4][7] Strategic Developments - Seagate has initiated the high-volume ramp of two new nearline platforms, including the first heat-assisted magnetic recording hard drive [4] - Western Digital reduced its debt by $2.6 billion and initiated a cash dividend of $0.72 per share [6]

Group 1 - Electronic Arts (EA) shares surged as the company agreed to be taken private for $55 billion by a consortium of investors, which includes the Saudi Public Investment Fund, Jared Kushner's Affinity Partners, and Silver Lake [2][5] - Major U.S. equities, including the Dow, S&P 500, and Nasdaq, experienced gains, driven by a rise in tech stocks [2][5] - Shares of hard drive manufacturers Western Digital (WDC) and Seagate Technology (STX) increased following price target upgrades from Morgan Stanley and Rosenblatt Securities, with expectations of benefiting from AI-driven demand [3] Group 2 - Mining giant Freeport McMoRan (FCX) saw its shares rise as gold prices reached an all-time high and copper futures hit their highest level since late July [3] - Oil companies, including ConocoPhillips (COP), Diamondback Energy (FANG), and Devon Energy (DVN), experienced a decline in shares as OPEC+ announced plans to increase oil output [4][5] - Intel (INTC) shares fell after TSMC (TSM) denied reports of partnership discussions, while TSMC shares slightly increased [4]

Core Insights - The rise of artificial intelligence (AI) has significantly boosted the stock performance of companies like Palantir Technologies and Seagate Technology, with Palantir's stock increasing by 2,500% since the start of 2023 and Seagate's stock gaining 121.4% in 2025 alone [2][7]. Company Performance - Palantir Technologies has integrated generative AI into its software, leading to soaring sales and profits, with a notable 120.7% rise in stock value in 2025 [2]. - Seagate Technology has experienced a surge in demand for nearline storage, shipping 137 exabytes of capacity last quarter, which is a 14% sequential increase and a 52% year-over-year increase [8]. - Seagate's revenue grew by 39% in fiscal 2025, with gross profit margin expanding from 23.4% to 35.2% year-over-year, and an impressive fourth-quarter gross margin of 37.4% [8]. Market Dynamics - The demand for data center storage is expected to rise significantly, from $13 billion in 2024 to $23 billion by 2028, indicating a prolonged growth cycle for companies like Seagate and Western Digital [10]. - Seagate and Western Digital are the two major suppliers of hard drives, both benefiting from the current demand cycle, which has led to strong gross margin expansion [9]. Competitive Landscape - Seagate has developed a technology lead with its heat-assisted magnetic recording (HAMR) process, which is expected to enable the production of 40TB hard drives by the second half of fiscal 2026, while Western Digital is lagging behind by about six months [13]. - The competition between Seagate and Western Digital typically keeps pricing low, but the current demand cycle has allowed for margin expansion [12]. Valuation Considerations - Seagate's forward price-to-earnings (P/E) ratio is 18.5, which is considered attractive compared to Palantir's 245 times earnings multiple, suggesting Seagate may be undervalued [14]. - Both Seagate and Western Digital are trading at a premium to their historical pricing, indicating that it may be prudent to wait for a better entry point before investing [16].