Key Takeaways We expect STX's Q4 mass capacity revenues to rise 39.5% year over year to reach $2 billion.Mozaic 3+ HAMR drives and 24-28TB PMR models now lead in both revenue and exabyte shipments.Gross margin is projected at 36.8%, up from 30.9%, driven by nearline demand and optimized pricing.Seagate Technology Holdings plc ((STX) is scheduled to report fourth-quarter fiscal 2025  earnings on July 29, after the closing bell.The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings is pegged at ...

The S&P 500 Index is witnessing a strong rally, with a record high close for the third straight session. The benchmark hit a new milestone of 6,300 on July 21, driven by optimism over strong second-quarter results and signs of economic resilience, even as uncertainty around U.S. trade policy persists.SPDR S&P 500 ETF Trust (SPY) , the proxy version of the S&P 500 Index, has gained 8% so far this year. While many stocks in the ETF have performed well, we have highlighted five stocks that have gained more tha ...

Core Insights - Micron Technology's DRAM revenues increased by 51% year over year in Q3 of fiscal 2025, reaching $7.1 billion, driven by growth in data center, automotive, PC, and mobile markets [1][10] - The DRAM segment accounted for 76% of the company's total revenue, with significant contributions from low-power server DRAM and high bandwidth memory (HBM) chips, particularly in AI workloads [2][3] - The company anticipates a high-teens percentage growth in industry DRAM bit demand for calendar 2025, supported by low inventory levels and higher-value product shipments [4] Financial Performance - The Zacks Consensus Estimate for fiscal 2025 DRAM revenues is $27.95 billion, indicating a year-over-year growth of 58.8%, with total revenues expected to grow 46.5% to $36.79 billion [5] - Micron's shares have gained 38.2% year to date, outperforming the Zacks Computer - Integrated Systems industry growth of 29.3% [8] - The forward price-to-sales ratio for Micron is 2.75X, which is lower than the industry average of 3.92X, indicating potential valuation attractiveness [11] Earnings Estimates - The earnings estimates for fiscal 2025 imply a year-over-year growth of 497.7%, while the 2026 estimates suggest a growth of 57.9%, with upward revisions in the past 30 days [14]

Core Insights - Western Digital Corporation (NASDAQ: WDC) is recognized as a leading provider of data storage solutions, particularly known for its hard disk drives (HDDs) [1] - The company is positioned for significant and long-term growth, primarily driven by the increasing demand for data storage due to the explosion in data generation [1] Company Analysis - The analysis emphasizes a quantamental approach, combining data-driven models with fundamental research to evaluate the company's financial profile [1] - Metrics such as PEG ratios are utilized in the structured investment process, which includes both top-down screening and bottom-up company-specific analysis [1] Investment Perspective - The article aims to make compelling research accessible to both retail and professional investors, ensuring analytical depth and a clear investment thesis [1] - There is an indication of a potential beneficial long position in WDC, suggesting a positive outlook on the company's stock [1]

Core Insights - Micron Technology (MU) experienced a significant rebound in profitability during Q3 of fiscal 2025, reporting a gross margin of 39%, which is an increase of 110 basis points from the previous quarter and 250 basis points above prior guidance [1][10] - The improvement in gross margin was primarily driven by better pricing for DRAM and NAND, along with cost discipline and volume growth [1][2] - Micron anticipates further margin expansion in Q4, projecting gross margins of 42% (+/-100 basis points), indicating a 300 basis point improvement quarter-over-quarter [3][10] Demand and Supply Dynamics - The demand environment is constructive, with strong demand for DRAM and higher-value memory products expected to support margin expansion [4] - Tight inventory levels, particularly for leading-edge and DRAM products, are likely to sustain pricing strength into Q4 [4][5] - For calendar year 2025, Micron forecasts high-teens percentage growth in industry DRAM bit demand and low double-digit percentage growth in NAND bit demand [5] Competitive Landscape - Micron does not have direct competitors listed on U.S. stock exchanges in the memory chip space but competes with Western Digital Corporation (WDC) in the NAND market and Seagate Technology Holdings plc (STX) in the data storage market [6][7] Financial Performance and Valuation - Year-to-date, Micron's shares have increased by 42%, outperforming the Zacks Computer - Integrated Systems industry's growth of 26.6% [8] - Micron's forward price-to-sales ratio stands at 2.91X, which is lower than the industry's average of 3.83X [11] - The Zacks Consensus Estimate for Micron's fiscal 2025 earnings indicates a year-over-year growth of 497.69%, with the 2026 earnings estimate showing growth of 57.36% [14]

Company Performance - Seagate has achieved a 65% return year-to-date in 2025, significantly outperforming the S&P 500's 5% increase, driven by structural improvements and a shift towards next-gen technologies like HAMR [3] - The company forecasts Q4 adjusted EPS to be between $2.20 and $2.60, with revenue expected between $2.25 billion and $2.55 billion [7] Market Context - Seagate's stock has historically shown significant volatility, with a peak-to-trough decline of 58% during the 2022 inflation crisis and a 35.6% drop during the COVID-19 pandemic [10][11] - The stock currently trades at 18x consensus 2025 earnings, well above its three-year average of 5x, indicating elevated investor confidence but also a potential for steep declines [11] Technological Advancements - Seagate's Mozaic 3+ platform achieves 3 TB per platter through HAMR technology, with plans for 40 TB drives in 2026 and 100 TB drives by 2030, positioning the company for long-term growth [6] - The demand for high-capacity HDDs is bolstered by the increasing need for data storage in generative AI and cloud infrastructure, where HDDs remain dominant for cold storage applications [5] Competitive Landscape - Seagate's price-to-sales ratio has risen to 3x, compared to Western Digital's typical 1x during market downturns, reflecting a premium valuation amid economic uncertainties [11] - Despite strong growth expectations, the stock's performance is susceptible to macroeconomic shocks and operational setbacks, with little margin for error [8]

Industry Overview - The Zacks Computer-Storage Devices industry is expected to experience robust growth due to factors such as digital transformation, edge computing, AI workloads, and enterprise cloud adoption [1] - The increasing demand for secure storage solutions driven by rising cyberattacks will further enhance the need for sophisticated data storage [1] - Major players in the industry include Western Digital Corporation (WDC), NetApp, Inc. (NTAP), and Teradata Corporation (TDC) [1] Trends Impacting the Industry - The rapid proliferation of AI is reshaping the tech landscape, leading to increased demand for high-speed, high-capacity, and low-latency storage solutions [3] - Traditional storage architectures are being replaced by NVMe-based SSDs and software-defined storage to meet the data throughput required by AI applications [3] - Cloud storage technologies are evolving, with companies leveraging AI and machine learning to optimize storage solutions and manage increasing data complexity [4] Market Conditions - Worldwide IT spending is projected to reach $5.61 trillion in 2025, reflecting a 9.8% increase from 2024, with the Devices segment expected to grow by 10.4% [5] - Despite positive IT spending forecasts, escalating trade tensions and macroeconomic uncertainties pose challenges to the industry [5] - The Zacks Computer-Storage Devices industry has underperformed the S&P 500, declining 32.4% over the past year compared to the S&P 500's gain of 9.7% [10] Company Highlights - **Western Digital (WDC)**: Focused on cloud end-markets, WDC is addressing supply chain challenges and expects strong data center demand to drive sales. The company has secured long-term deals through mid-2026 [17][18] - **Teradata (TDC)**: TDC's innovations in AI and hybrid cloud are gaining traction, with partnerships with major cloud service providers enhancing its offerings. The company has launched the Enterprise Vector Store to support AI applications [21][22] - **NetApp (NTAP)**: NTAP is experiencing increased demand for its all-flash arrays and expects to capture more market share. The company reported five-fold year-over-year growth in its AI business for the fiscal fourth quarter of 2025 [27][29]

Market Performance - The S&P 500 recorded its best May performance since 1990, rising over 6% in the month, marking its largest monthly gain since November 2023 [1] - SPDR S&P 500 ETF Trust (SPY) gained 6.3% over the past month, with five highlighted stocks gaining more than 25% [2] Key Drivers of Market Rally - The stock rally was primarily driven by a resurgence in tech stocks due to strong earnings and investor confidence in AI-driven growth [3] - Easing trade tensions contributed to market optimism, with the U.S. temporarily reducing tariffs on Chinese goods from 145% to 30%, and China lowering retaliatory duties from 125% to 10% [4] - The U.S. Court of International Trade blocked much of Trump's existing tariff policy, providing a temporary boost to equities [5] - Economic data showed mixed signals, with the Federal Reserve's preferred inflation measure cooling and the U.S. labor market adding 177,000 jobs, while consumer spending showed signs of slowdown [6] SPY Fundamentals - SPY holds 503 stocks, with no single stock accounting for more than 7% of its assets, indicating a balanced portfolio [8] - The fund has an AUM of $603.5 billion, charges 9 bps in fees per year, and trades an average of 68 million shares daily [9] Best-Performing Stocks - NRG Energy Inc. saw a 36% increase in the past month, with a solid earnings estimate revision of 19 cents and an estimated growth of 10.54% [10] - Seagate Technology jumped about 28% in a month, with a positive earnings estimate revision of 8 cents and an estimated growth of 516.3% [11] - Constellation Energy gained 26.8% in a month, despite a negative earnings estimate revision of 7 cents, with an expected growth rate of 9% [12] - Insulet Corporation rose 26.5%, with a positive earnings estimate revision of 3 cents and an estimated growth rate of 33% [13] - Microchip Technology gained over 25% in a month, with a solid earnings estimate revision of 19 cents and expected earnings to break even this fiscal year [14]

Core Viewpoint - Seagate Technology Holdings plc (NASDAQ: STX) is recognized as a leading supplier of hard disk drives (HDDs), which are essential for data storage in large-scale data centers, holding nearly 90% of the data in these facilities [1] Group 1: Company Overview - Seagate is a major player in the HDD market, with its products being critical for data storage solutions [1] - The company benefits from the fact that over 80% of data in large-scale data centers is stored on HDDs, highlighting the importance of its technology in the industry [1]