Seagate soars after earnings as Wall Street gushes
Seagate Technology Holdings soared Wednesday, with a nearly 20% gain shortly after 2 p.m. ET that put the once staid maker of hard disk drives on track for one of its best days of the last decade.
Seagate reported strong earnings results after the close of trading on Tuesday, prompting a parade of positive published comments from Wall Street analysts.
The Street gushed over high sales prices and customer orders for data centers and cloud computing providers stretching out to 2028. Analysts were also heartened by the rollout of Seagate’s next-generation hard disk product, known as heat-assisted magnetic recording (HAMR), which has now been “qualified” or approved for use by major US cloud service providers. Some examples:
Bernstein Research: “Demand remains strong, supply remains disciplined with pricing better than expected.”
Morgan Stanley: “We continue to be amazed by the strength of this HDD [hard disk drive] cycle; even with better-than-expected supply, HDD shortages are intensifying given CSP [cloud service provider] data storage demand.”
Citi: “Nearline capacity fully allocated through [2026], and demand visibility is strengthening based on [long-term agreements] with major cloud customers through [2027] (with pricing to be negotiated). Multiple cloud customers now currently discussing demand for [2028] to ensure supply.”
Mizuho: “Nearline cloud capacity sold out for [calendar year 2026] with leading cloud customer allocations locked in for [2027] and multiple customers already working to fill [2028] demand.”
Wedbush Securities: “The company has qualified HAMR at all US customers as minimizing any concerns around STX’s execution on its newer/higher capacity platforms. In turn, we believe this result in our view bodes well for STX’s continued ramp of HAMR.”
Seagate’s remarkable surge raises the prospect of a reacceleration of the share price gains of Seagate and Western Digital, the duopoly that dominates the market for hard disk drives, the low-cost data storage products that are nonetheless crucial for managing the torrent of data that AI usage is producing.
The two companies were some of the best performers in the S&P 500 last year, rising 219% and 282%, respectively. If anything, the rally seems to be picking up steam, with Seagate up 62% year to date and Western Digital up about the same amount not even a month into 2026.
Bernstein Research: “Demand remains strong, supply remains disciplined with pricing better than expected.”
Morgan Stanley: “We continue to be amazed by the strength of this HDD [hard disk drive] cycle; even with better-than-expected supply, HDD shortages are intensifying given CSP [cloud service provider] data storage demand.”
Citi: “Nearline capacity fully allocated through [2026], and demand visibility is strengthening based on [long-term agreements] with major cloud customers through [2027] (with pricing to be negotiated). Multiple cloud customers now currently discussing demand for [2028] to ensure supply.”
Mizuho: “Nearline cloud capacity sold out for [calendar year 2026] with leading cloud customer allocations locked in for [2027] and multiple customers already working to fill [2028] demand.”
Wedbush Securities: “The company has qualified HAMR at all US customers as minimizing any concerns around STX’s execution on its newer/higher capacity platforms. In turn, we believe this result in our view bodes well for STX’s continued ramp of HAMR.”
Seagate’s remarkable surge raises the prospect of a reacceleration of the share price gains of Seagate and Western Digital, the duopoly that dominates the market for hard disk drives, the low-cost data storage products that are nonetheless crucial for managing the torrent of data that AI usage is producing.
The two companies were some of the best performers in the S&P 500 last year, rising 219% and 282%, respectively. If anything, the rally seems to be picking up steam, with Seagate up 62% year to date and Western Digital up about the same amount not even a month into 2026.
