Group 1 - Analysts project Seagate (STX) will announce quarterly earnings of $2.46 per share, a 134.3% increase year over year [1] - Revenues are expected to reach $2.41 billion, reflecting a 27.5% increase from the same quarter last year [1] - The consensus EPS estimate has been revised 0.5% higher over the last 30 days, indicating a collective reevaluation by analysts [2] Group 2 - Analysts suggest that 'Revenue by Product Line- HDD- Legacy' will be $245.91 million, a decrease of 15.2% year over year [5] - The estimate for 'Revenue by Product Line- HDD- Mass Capacity' is projected at $2.01 billion, an increase of 39.6% from the prior-year quarter [5] - The consensus estimate for 'Capacity Shipped - Total' and 'Capacity Shipped - Legacy' remains N/A, with no prior year figures available [6] Group 3 - Over the past month, Seagate shares have returned +6.7%, outperforming the Zacks S&P 500 composite's +4.9% change [6] - Seagate currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [6]

Core Insights - Western Digital's stock has increased by over 5% in a single trading day and nearly 40% over the past month, driven by positive developments in the company's financial performance and strategic initiatives [1] Group 1: Share Buyback Program - Western Digital announced a $2 billion share buyback program, reflecting strong confidence in its long-term prospects and reinforcing its shareholder-oriented capital allocation strategy [2] Group 2: Q3 Earnings Performance - In Q3 FY25, Western Digital reported $2.3 billion in revenue, a 31% year-over-year growth despite a 5% quarterly decrease. Non-GAAP EPS rose by 15% to $1.36, with gross margin increasing to 40.1% [3] - The Cloud division generated $2.0 billion, accounting for 87% of total revenue, and experienced a 38% year-over-year growth, driven by increased data demands from hyperscale cloud providers and AI adoption [3] Group 3: Positive Guidance - For the fiscal fourth quarter ending June 27, 2025, Western Digital provided a positive revenue forecast of $2.45 billion ± $150 million and non-GAAP EPS of $1.45 ± $0.20, both exceeding analyst expectations [4] - The company expects to maintain gross margins between 40.0% and 41.0%, with non-GAAP operating expenses managed between $330 million and $340 million, positioning itself favorably to benefit from the growing demand for high-capacity storage due to AI adoption [4] Group 4: Stock Volatility - Over the past four years, Western Digital's stock has shown significant volatility compared to the S&P 500, with annual returns of 18% in 2021, -52% in 2022, 66% in 2023, and 14% in 2024 [5] Group 5: Valuation Insights - Current assessment places Western Digital's stock value around $49 per share, aligning closely with its market value, indicating a balanced valuation perspective [7]

Core Viewpoint - Rosenblatt analyst Kevin Cassidy has relaunched coverage on Western Digital (WDC) with a Buy rating and lowered the price target from $76 to $50, reflecting a valuation based on expected profitable growth in the HDD market [1] Group 1: Market Dynamics - HDDs are expected to remain the dominant storage media, accounting for over 80% of cloud storage, with exabyte shipments projected to grow at a 23% CAGR from 2024 to 2028 [2] - AI-driven storage demand is accelerating, contributing an estimated 8% growth to the HDD market by 2028, with Nearline HDD growth forecasted at 14% CAGR when including AI [2][3] Group 2: Financial Performance - Western Digital anticipates fiscal 2025 revenue for HDDs to be approximately $2.2 billion to $2.3 billion, with a sequential gross margin expansion of 50 basis points [5] - The company expects to generate $600 million from the SanDisk spin-off and aims for adjusted gross margins of 38% or higher and operating margins of 24% or higher in the long term [6] Group 3: Strategic Focus - Western Digital is shifting its focus to cloud storage, projected to contribute 88% of revenue by fiscal 2025, with Nearline HDDs being the primary revenue driver [3][4] - The company is transitioning to higher-capacity HDDs (40TB+) with EAMR and HAMR technologies to maintain cost-competitive leadership in the AI-driven era [8][10] Group 4: Cost Competitiveness - HDDs maintain a six times cost advantage over enterprise SSDs and a 3.6 times TCO advantage, with plans to transition to HAMR technology by 2027 [4][9] - HDD manufacturing has a capital intensity of just 5%, significantly lower than NAND's 44%, and has lower emissions intensity per TB [9] Group 5: Shareholder Returns - Western Digital is initiating a dividend in the fourth quarter of fiscal 2025 and is committed to returning 100% of excess cash to shareholders after achieving a net leverage target of 1.0 to 1.5 times EBITDA [7]