3 Reasons Seagate Technology Could Be Worth a Closer Look Ahead of July 28 Earnings

Seagate Technology (NASDAQ:STX) is 1 of the sole-source picks-and-shovels suppliers to hyperscalers that has already contracted nearline capableness astir afloat done calendar twelvemonth 2027. Here are 3 reasons wherefore Seagate could beryllium worthy a person look up of the company's Q4 net connected July 28.

3 Numbers That Make Seagate Impossible to Ignore

Growth is accelerating, not decaying. Fiscal Q3 gross landed astatine $3.11 billion, up 44.07% twelvemonth implicit year, beating statement by 5.22%. Non-GAAP EPS of $4.10 cleared the $3.506 estimation by 16.94%. Management past guided Q4 to $3.45 cardinal successful gross and $5.00 successful EPS astatine the midpoint, and CEO Dave Mosley raised the multi-year gross maturation people from low- to mid-teens to a minimum of 20% implicit the adjacent fewer years.

The currency travel is investment-grade. Free currency travel deed $953 million, up 341.2% twelvemonth implicit year, connected a 31% escaped currency travel margin. Seagate retired $641 cardinal of indebtedness successful the quarter, pushed nett leverage to 0.7x, earned an investment-grade upgrade from Fitch, and raised the quarterly dividend to $0.74 per share.

The catalyst is disposable connected paper. The apical 3 unreality work providers have astir doubled their remaining show obligations to $1.1 trillion. Seagate's Mozaic 4 HAMR drives vessel up to 44 terabytes per drive, implicit 30% much capableness than first-generation Mozaic. Polymarket traders delegate a 93.5% probability that Q4 hard thrust exabyte shipments volition transcend 190.

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The Bottom Line: Seagate's AI Demand Is Locked In Through 2027

The biggest hazard contiguous is that data-center retention request yet slows. However, Seagate has already booked nearly each of its disposable nearline capableness done 2027, portion profitability has improved for 12 consecutive quarters.

Wall Street remains bullish, with 21 bargain ratings, 3 holds, and lone 1 sell. Analysts' mean terms people of $1,008.61 besides implies 18.4% upside from the existent terms of $851.69. Investors tin cod Seagate's rising dividend portion its contracted hyperscaler request supports continued gross and net growth.

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