The Singapore-based Seagate Technology Holdings plc (STX) builds the backbone of the digital economy. With a market cap of approximately $92.9 billion, the company designs and manufactures hard disk drives, solid-state drives, hybrid drives, and storage subsystems. It also delivers scalable edge-to-cloud platforms that power data centers, cloud providers, enterprises, and equipment manufacturers worldwide. Over the past 52 weeks, Seagate’s shares have surged 319.8%, significantly outperforming the S&P 50 ...

Core Insights - Western Digital Corporation's (WDC) shares have surged 305.2% over the past year, significantly outperforming the Zacks Computer-Storage Devices industry growth of 134.3% and the S&P 500's growth of 15.7% [1][8] - The primary driver of this growth is the increasing demand for data storage driven by AI and cloud workloads [1][8] Company Performance - WDC has outperformed its main competitor, Seagate Technology Holdings plc (STX), which rose 301.3%, and Pure Storage (PSTG), which increased by 12.6% during the same period [2] - The company reported $3.02 billion in revenue for the fiscal second quarter, marking a 25% year-over-year increase, primarily due to strong data center demand [11] - WDC's non-GAAP gross margin improved to 46.1%, up 770 basis points year over year, attributed to a transition to higher-capacity drives and effective cost management [11] Strategic Developments - At its Innovation Day 2026, WDC emphasized the reinvention of hard drives as essential for AI infrastructure, introducing a new financial model and branding [5] - The company is pursuing a dual-path strategy with its HDD technologies, focusing on both ePMR and HAMR to meet growing storage demands [6] - WDC plans to introduce a 40TB UltraSMR ePMR HDD in the second half of 2026 and a 100TB HAMR HDD by 2029, showcasing its commitment to innovation [6][10] Capital Return and Financial Health - WDC has returned $1.4 billion to shareholders through buybacks and dividends since launching its capital return program in 2025 [12][13] - The company declared a quarterly dividend of 12.5 cents per share and returned over 100% of free cash flow to shareholders in the fiscal second quarter [12] - As of January 2, 2026, WDC had cash and cash equivalents of $2 billion and long-term debt of $4.7 billion, indicating a need for careful financial management [14] Market Outlook - The Zacks Consensus Estimate for WDC's earnings for fiscal 2026 has been revised up by 17.4% to $8.96, while the estimate for fiscal 2027 has increased by 54.3% to $15.19 [17] - The ongoing demand for AI-generated data is expected to drive significant growth in storage needs, positioning WDC favorably for the future [19]

As widely expected, the Federal Reserve left interest rates unchanged yesterday. The Federal Open Market Committee voted 10-2 to keep the federal funds rate in a range of 3.50%-3.75%. Governors Christopher Waller and Stephen Miran dissented in favor of a quarter-point cut. In a post-meeting statement, officials said “job gains have remained low, and the unemployment rate has shown some signs of stabilization.” Policymakers also removed language referring to heightened downside risks to employment that had a ...

Core Viewpoint - Seagate Technology Holdings PLC experienced a significant stock increase following strong quarterly results and raised guidance, leading to two firms raising their price forecasts to $500 [1] Group 1: Analyst Price Forecasts - Cantor Fitzgerald analyst C.J. Muse raised the price forecast to $500 from $400, maintaining an Overweight rating, citing gross margins of approximately 70% during the December quarter and a gross margin guide of at least 44% [2] - Rosenblatt Securities analyst Kevin Cassidy also raised the price forecast to $500 from $370, maintaining a Buy rating, and increased the valuation multiple to 25 times from 20 times non-GAAP EPS, highlighting expanding gross margins above 45% and operating margins above 35% [4] Group 2: Earnings Performance - Seagate reported quarterly earnings of $3.11 per share, surpassing the analyst consensus estimate of $2.81, with quarterly revenue reaching $2.83 billion, exceeding the Street estimate of $2.73 billion and up from $2.33 billion in the same period last year [5][6] - The CEO of Seagate noted that the December quarter results set new records for gross margin, operating margin, and non-GAAP EPS, reflecting strong operational execution and robust data center demand [6] Group 3: Future Outlook - The company indicated that its nearline storage capacity is fully booked through calendar 2026, with orders for the first half of 2027 expected to open soon, and long-term agreements with major cloud customers provide strong demand visibility through 2027 [7] - Seagate expects third-quarter adjusted EPS of $3.20 to $3.60, compared to the $2.96 analyst estimate, and revenue of $2.8 billion to $3 billion, versus the $2.77 billion analyst estimate [8]

Seagate Technology (STX) is trading at new all-time highs on Tuesday. Shares are up more than 230% over the past 52 weeks. STX maintains a 100% “Buy” technical opinion from Barchart. Seagate has benefitted massively from AI-driven demand for memory and storage products. Today’s Featured Stock Valued at $76.5 billion, Seagate Technology (STX) is one of the largest manufacturers of hard disk drives in the U.S. These drives are responsible for storing information, including at data centers. Seagate ...

Seagate Technology Holdings PLC Earnings Preview: A Look into the FutureSeagate Technology Holdings PLC (NASDAQ:STX) is a leading figure in the data storage industry, renowned for its hard disk drives and storage solutions. As the company gears up to unveil its quarterly earnings on January 27, 2026, after the market closes, Wall Street analysts have set the earnings per share (EPS) expectation at $2.78 and anticipate revenue to be around $2.73 billion. This announcement is eagerly awaited, considering the ...

Summary of Hard Disk Drives Industry Earnings Preview Industry Overview - The report focuses on the Hard Disk Drives (HDD) industry in North America, specifically analyzing Seagate Technology (STX.O) and Western Digital (WDC.O) [1][5][7]. Key Companies and Price Targets - **Seagate Technology (STX.O)**: Price target raised from $337.00 to $372.00 [1][5]. - **Western Digital (WDC.O)**: Price target raised from $228.00 to $260.00 [1][5]. Core Insights and Arguments - **Revenue and EPS Outlook**: Modest revenue upside and strong gross margin improvements are expected to drive positive EPS revisions for both companies this quarter, with estimates biased upwards by 4-5% [4][7]. - **HDD Demand Drivers**: Continued strength in HDD demand is attributed to: 1. Better than expected exabyte (EB) output. 2. Positive mix shift towards higher capacity drives. 3. Relative pricing strength [4][7]. - **Industry Supply-Demand Dynamics**: The HDD industry is experiencing a supply shortage of over 10% against demand, leading to consistent price increases [7][11]. Financial Performance Expectations - **Gross Margin Projections**: - WDC's gross margin is expected to expand by 60 basis points quarter-over-quarter, while STX's is projected to expand by 110 basis points [17][22]. - Both companies are expected to achieve gross margins above consensus estimates, with WDC at 45.0% and STX at 41.2% for the December quarter [22][24]. - **Earnings Estimates**: - December quarter EPS estimates for WDC and STX are projected at $1.99 and $2.90, respectively, with March quarter estimates at $2.06 and $3.14 [24][27]. Market Trends and Future Outlook - **Cloud Storage Demand**: The correlation between HDD revenue growth and cloud capital expenditure growth is strong, indicating that demand for HDDs will continue to rise as cloud services expand [9][10]. - **Innovation and Product Development**: WDC's upcoming "Innovation Day" on February 3rd is expected to provide updates on product roadmaps, particularly regarding high-capacity drives [38][39]. - **Investment Thesis**: Both STX and WDC are rated as Overweight, with WDC being the top pick due to more immediate positive catalysts and a better risk-adjusted return [28][43]. Risks and Considerations - **Potential Risks**: - The HDD industry may face challenges such as pricing normalization, geopolitical tensions, and competitive pressures that could impact margins and growth [60]. - **Market Sentiment**: Despite potential near-term misses in earnings expectations, the long-term outlook remains positive due to strong demand trends in data centers and cloud storage [28][40]. Conclusion - The HDD industry is poised for growth driven by strong demand in cloud storage, favorable pricing dynamics, and improving gross margins. Both Seagate and Western Digital are well-positioned to capitalize on these trends, with upward revisions to earnings estimates reflecting a robust outlook for the sector [1][4][7].

Core Insights - Deep-pocketed investors have adopted a bearish approach towards Seagate Technology Holdings, indicating potential significant market movements ahead [1] - The options activity shows a divided sentiment among investors, with 34% bullish and 48% bearish, highlighting a notable level of trading activity [2] Options Activity - A total of 35 extraordinary options activities were recorded for Seagate Technology Holdings, with puts totaling $352,191 and calls amounting to $3,682,958 [2] - The expected price movements for Seagate Technology Holdings are projected within a range of $115.0 to $420.0 based on recent options activity [3] Volume and Open Interest - An analysis of volume and open interest trends over the last 30 days reveals significant liquidity and interest in Seagate Technology Holdings' options, particularly within the identified strike price range [4][5] Largest Options Trades - Notable options trades include a bearish call trade with a total price of $1.4 million and a bullish call trade priced at $370,000, indicating mixed investor sentiment [8] Company Overview - Seagate Technology Holdings is a leading supplier of hard disk drives, operating in a practical duopoly with Western Digital in the data storage market [8] Current Market Status - The current trading volume for Seagate Technology Holdings stands at 1,224,588, with the stock price at $319.48, reflecting a decrease of -0.62% [11] - Analysts have issued a consensus target price of $337.0, with an Overweight rating from Morgan Stanley [10]

Core Viewpoint - Seagate Technology Holdings plc (STX) is poised to report strong earnings growth driven by increasing demand for data storage solutions, particularly in the context of data center expansion and AI-related needs [1][5]. Financial Performance - Analysts anticipate STX will report a profit of $2.55 per share for the fiscal second quarter of 2026, reflecting a 40.1% increase from $1.82 per share in the same quarter last year [2]. - For the full fiscal year, EPS is expected to reach $10.40, a 43.3% increase from $7.26 in fiscal 2025, with further growth projected to $14.37 in fiscal 2027, representing a 38.2% year-over-year rise [3]. Stock Performance - STX shares have significantly outperformed the S&P 500 Index, rising 238.5% over the past 52 weeks compared to the index's 16.5% gain [4]. - The stock has also outperformed the Technology Select Sector SPDR Fund, which gained 24.4% during the same period [4]. Market Drivers - The strong performance of STX is attributed to surging demand for storage solutions, driven by data center expansions and investments in generative AI by cloud providers, as well as the massive data requirements associated with AI [5]. - Hard disk drives (HDDs) are positioned as a cost-effective option for "cool" data storage, allowing Seagate to capitalize on the growing data creation and AI-related demand [5]. Recent Results and Expectations - In its Q1 results, STX reported an adjusted EPS of $2.61, surpassing Wall Street's expectations of $2.36, with revenue of $2.6 billion exceeding the forecast of $2.5 billion [6]. - For Q2, STX expects adjusted EPS to range from $2.55 to $2.95 and revenue between $2.6 billion and $2.8 billion [6]. Analyst Ratings - The consensus opinion on STX stock is bullish, with a "Strong Buy" rating from 18 out of 24 analysts, while one suggests a "Moderate Buy," four give a "Hold," and one recommends a "Strong Sell" [7]. - The average analyst price target for STX is $297.05, indicating a marginal potential upside from current levels [7].

Core Insights - Western Digital Corporation (NASDAQ:WDC) is recognized as one of the 15 best-performing AI stocks heading into 2026, with a positive outlook from analysts [1][2] - Bank of America Securities has reiterated a Buy rating on WDC, raising the price target from $170 to $197, while TD Cowen increased its target from $90 to $200 [1][2] - The hard disk drive (HDD) industry outlook remains positive, with WDC expected to achieve a cyclical high gross margin of over 50%, compared to approximately 31% in the previous cycle [2][3] Industry Outlook - Analysts from TD Cowen noted that WDC reported "flawless" results, indicating strong business performance and growth potential extending into 2027 [2] - JPMorgan analysts highlighted that WDC has secured purchase orders with five major customers extending through 2026, driven by increasing AI-related demand [4]