Seagate Technology delivered a strong set of third-quarter results that comfortably exceeded Wall Street expectations, sending its shares sharply higher in premarket trading and reinforcing investor confidence in the durability of artificial intelligence-driven demand for data storage.
The hard-drive maker reported adjusted earnings of $4.10 per share for the quarter, more than doubling from $1.90 a year earlier and beating the consensus estimate of $3.51.
Revenue rose 44% year-on-year to $3.1 billion, also ahead of expectations.
Shares of Seagate Technology surged 15% in premarket trading on Wednesday, while the upbeat outlook lifted sentiment across the broader storage sector.
AI boom drives demand surge
Seagate’s results highlight the growing impact of artificial intelligence on enterprise infrastructure spending, particularly in data storage.
Companies investing heavily in AI are also ramping up spending on storage systems to handle the vast volumes of data required to train and run advanced models.
This trend has tightened supply conditions for hard drives, benefiting manufacturers such as Seagate and Western Digital.
We believe Seagate is entering a new era of structural growth as AI applications amplify data creation and support sustained storage demand.
Dave Mosley
CEO, Seagate Technology
The surge in demand has also contributed to rising memory prices and capacity constraints, with industry executives indicating that available production is largely sold out through 2026.
The strong outlook from Seagate spilled over into peers, with shares of Western Digital jumping 9% in premarket trading, while Micron Technology gained about 4.5% and SanDisk rose 6%.
Analysts raise price targets
Following the results, several brokerages raised their price targets on Seagate shares, citing stronger-than-expected fundamentals and sustained demand visibility.
Morgan Stanley raised its price target to $767 from $582, maintaining an “Overweight” rating.
The firm noted that its previous bull-case scenario has now become its base case for the third consecutive quarter, as pricing, margins, and earnings continue to exceed expectations.
The bank also highlighted that hard disk drives still account for roughly 80% of cloud storage demand, even as AI-driven data creation accelerates.
Mizuho raised its target to $700 from $565 and reiterated an “Outperform” rating, citing strong adoption of Seagate’s Mosaic3 and Mosaic4 technologies among major cloud providers.
Mizuho expects Mosaic4 to account for more than half of Heat-Assisted Magnetic Recording (HAMR) exabytes by the end of 2026, with HAMR drives making up about 70% of total shipments by mid-2027.
Meanwhile, Citigroup analyst Asiya Merchant raised her price target to $740 from $595, citing stronger-than-expected demand trends.
Strong guidance lifts outlook
Seagate’s guidance for the fourth quarter further underscored the strength of the current demand cycle.
The company forecast revenue of $3.45 billion, plus or minus $100 million, above analyst estimates of $3.16 billion.
It also projected adjusted earnings of about $5 per share, compared with expectations of $3.97.
The outlook assumes minimal impact from tariffs or geopolitical tensions, including the ongoing conflict involving Iran.
The strong forecast signals continued momentum in enterprise AI spending, even as broader market concerns persist about the pace of adoption.
Seagate’s shares have already more than doubled this year after tripling in 2025, reflecting investor optimism about its positioning in the AI infrastructure ecosystem.
With demand for data storage continuing to expand alongside AI applications, Seagate appears well-positioned to benefit from what executives and analysts increasingly describe as a multi-year structural growth cycle.
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