Core Insights - Seagate's shares increased by over 10% following a strong fiscal Q1 2026 earnings report, with revenue rising 21% year-on-year to $2.63 billion and adjusted EPS reaching $2.61, surpassing Wall Street expectations [1] Group 1: Operational Performance - Seagate delivered a record 182 exabytes of hard-drive capacity in the quarter ending October 3, 2025, with 159 exabytes from nearline drives, highlighting the importance of cloud exposure in revenue growth [3] - The average capacity per drive increased to 14.6 terabytes, reflecting a 26% year-on-year rise in nearline drive capacity, which supports AI and data-heavy workloads and contributes to margin expansion [4] - Seagate shipped over 1 million Mozaic HAMR drives during the September quarter, indicating a shift from proof-of-concept to commercial production [5] Group 2: Market Position and Future Outlook - Five major cloud service providers have approved Seagate's Mozaic 3+ HAMR platform, with additional qualifications expected to enhance supply visibility and support upgraded guidance [7] - Seagate's advancements in drive density, product qualification, and manufacturing capabilities suggest a pivotal moment, aligning technological progress with increasing AI-driven storage demand [8] - The current market enthusiasm for Seagate may indicate the beginning of a sustained structural uptrend, driven by next-generation HAMR drives and deeper cloud qualifications [9]

Photo illustration by Cheng Xin/Getty ImagesGetty ImagesSeagate (NASDAQ: STX) shares soared by more than ten percent after the data storage powerhouse exceeded expectations in its fiscal Q1 2026 earnings. Revenue rose 21% compared to the previous year, reaching $2.63 billion, and the adjusted EPS climbed to $2.61, both substantially higher than Wall Street forecasts. While headlines highlighted the AI-driven recovery, Seagate’s filings contain several key operational metrics that demonstrate the depth of th ...

To supplement the consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses non-GAAP measures of gross profit, gross margin, operating expenses, income from operations, operating margin, net income, diluted EPS, free cash flow, EBITDA, adjusted EBITDA and the last twelve months (LTM) adjusted EBITDA, which are adjusted from results based on GAAP to exclude certain benefits, expenses, gains and losses. A full discussion of these adju ...

Core Insights - Seagate Technology is experiencing a significant turnaround, with strong investor confidence reflected in a 166% year-to-date stock increase, driven by improved pricing discipline and technological advancements like Heat-Assisted Magnetic Recording (HAMR) [5][6][7] Financial Performance - Seagate reported a 30% year-on-year revenue increase to $2.44 billion for the June quarter, with fiscal 2025 sales rising nearly 40% to $9.1 billion [6] - Adjusted EPS for fiscal 2025 reached $8.10, up from $1.29 in fiscal 2024, exceeding Wall Street projections, alongside a record gross margin of 35.8% [6][10] - The company anticipates continued revenue growth, estimating around $2.5 billion for the upcoming quarter, reflecting a 15% year-on-year rise [10] Market Position and Growth Prospects - Analysts expect Seagate's EPS to grow at a compound annual rate of over 20% through fiscal 2027, positioning the company favorably in a maturing market [2] - The HDD sector is undergoing a transformation, with expanding margins and improved supply dynamics, driven by the increasing significance of AI in the data economy [1][3] Technological Advancements - Seagate's HAMR technology is a key driver of its operational turnaround, allowing for higher data storage capacity and efficiency, particularly suited for cloud and AI applications [7][8] - The company has received validation from three major cloud service providers for its Mozaic HAMR drives, indicating a shift from pilot to mainstream usage [8] Analyst Ratings and Price Targets - Wall Street rates Seagate stock as a consensus "Strong Buy," with 16 out of 22 analysts recommending a "Strong Buy" [12] - The stock is trading close to an average analyst price target of $220.90, with a high price estimate of $330, suggesting a potential upside of 44% over the next 12 months [12] Shareholder Returns - Seagate plans to resume share repurchases, having distributed nearly 75% of its fiscal 2025 free cash flow through dividends and buybacks [9] - The company ended the June quarter with $2.2 billion in liquidity and reduced its debt by approximately $150 million, doubling its free cash flow to $425 million [8]