Seagate's bullish forecast sends storage stocks soaring as AI spending confidence surges

Storage stocks jump as Seagate's upbeat forecast fuels confidence in AI spending

April 28 (Reuters) - Shares of storage companies jumped in extended trading on Tuesday, after strong revenue and profit forecasts from Seagate Technology (STX.O), opens new tab signaled that spending by enterprises on artificial intelligence equipment will remain strong. Seagate's strong forecast and the late-day surge in storage stocks underscore investors' confidence that enterprise AI spending will sustain demand for data-storage equipment despite broader market concerns about the pace of AI adoption. Companies have funneled increasing amounts of money into data drives, hard disks and other digital storage as they rushed to upgrade their artificial intelligence models and infrastructure. Shares of Seagate soared 16% in extended ⁠trading, while Western Digital (WDC.O), opens new tab jumped 10%, Micron Technology (MU.O), opens new tab climbed 3% and SanDisk (SNDK.O), opens new tab rose 4%, adding a combined $60 billion to the four storage technology companies' market value. "AI is amplifying demand across existing applications such as video, where large cloud providers are integrating AI in the platforms to boost user engagement and revenue opportunities, driving new video creation and the need to store it," said Seagate CEO Dave Mosley on a post-earnings conference call. Seagate forecast fourth-quarter revenue of $3.45 billion, plus or minus $100 million, beating estimates of $3.16 billion, according to data compiled by LSEG. Executives at Seagate ⁠and rival Western Digital have previously said their capacity has been fully allocated and sold out through calendar 2026. In Tuesday's trading session, the Nasdaq (.IXIC), opens new tab fell almost 1%, hurt by concerns about the AI boom after a report said OpenAI has fallen short of its goals for new users and revenue in recent ⁠months. Nasdaq futures rose 0.2% following Seagate's report, showing that traders expect tech stocks to partly rebound in Wednesday's session. The rise in storage demand also comes alongside a surge in memory prices, as power-hungry data ⁠centers use a significant portion of high-bandwidth memory to store and process massive amounts of information. The shortage of memory chips has left companies scrambling to find hardware that can aid ⁠their AI efforts and store data, benefiting companies such as Seagate that make physical hard drives. Ahead of Tuesday's report, Seagate shares had already more than doubled, year to date. Reporting by Zaheer Kachwala in Bengaluru; additional reporting by Noel Randewich; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab

Data Is a 'Strategic Asset' Now -- and Memory Stocks Just Can't Stop Flying

Get personalized, AI-powered answers built on 27+ years of trusted expertise. The AI crowd is getting fired up, and the headliners haven't even hit the stage yet. Investors on Wednesday sent pick-and-shovel AI plays soaring hours before the Big Tech Earningspalooza -- with results from Alphabet (GOOGL), Amazon (AMZN), Meta (META) and Microsoft (MSFT) -- is set to start. Shares of hard drive maker Seagate Technology (STX) surged after the company raised its outlook on AI-driven demand for its June-end quarter, lifting other companies in the category including Sandisk (SDK) and Western Digital (WDC). All three stocks extended their rallies, landing among the day's top S&P 500 gainers. Renewed appetites for the AI boom is on full display. Seagate and other data storage stocks have risen many times over, some as much as 3,000%, in the past year, and their stocks could continue rallying as tech giants report earnings and detail how much they stand to spend on developing their AI capabilities, giving more insight into revenue upside for the companies providing the hardware. Seagate guided investors toward current-quarter revenue in the range of $3.45 billion, give or take $100 million, representing a roughly 40% year-over-year rise at the midpoint, compared to consensus estimates for $3.13 billion, per analysts tracked by Visible Alpha. The company also forecast adjusted earnings per share of $5, plus or minus 20 cents, which was also above analyst expectations. "AI is reshaping data into a strategic asset," Seagate chief financial officer Gianluca Romano said during the company's earnings call Tuesday evening, according to a transcript provided by AlphaSense. Sandisk and Western Digital are due to report after the market's close on Thursday

Data-storage stocks jump as Seagate's upbeat forecast fuels confidence in AI spending

Shares of data-storage firms saw a significant jump. This follows strong revenue and profit forecasts from Seagate Technology. The outlook suggests enterprise spending on artificial intelligence equipment will continue. Companies are investing heavily in data drives and storage. This trend is expected to sustain demand for storage equipment. Seagate's forecast boosted investor confidence in the sector. Shares of data-storage companies jumped on Wednesday, a day after strong revenue and profit forecasts from Seagate Technology signaled that spending by enterprises on artificial intelligence equipment will remain strong. Seagate's strong forecast and the surge in storage stocks underscore investor confidence that enterprise AI spending will sustain demand for data-storage equipment despite broader market concerns about the pace of AI adoption. Companies have funneled ⁠increasing amounts ⁠of money into data drives, hard disks and other digital storage as they rushed to upgrade their artificial intelligence models and infrastructure. Shares of Seagate soared nearly 17%, while Western Digital jumped 9%, Micron Technology climbed about 4% and SanDisk rose nearly 8%. If gains hold, the four storage technology companies are set to add over $60 billion in combined market value. "AI is amplifying demand across existing applications such as video, where large cloud ⁠providers are integrating AI in the platforms to boost user engagement and revenue opportunities, driving new video creation and the need to store it," said Seagate ⁠CEO Dave Mosley on a post-earnings conference call. Analysts at Morningstar said the AI buildout is likely to give hard disk drive makers stronger pricing power through at least 2030, and potentially longer, which could further lift valuations. Seagate, whose shares have already more than doubled so far this year, forecast fourth-quarter revenue of $3.45 billion, plus or minus $100 million, beating estimates of $3.16 billion, according to data compiled by LSEG. Executives at Seagate and rival Western Digital have previously said their capacity has been fully allocated and sold out through calendar 2026. In Tuesday's trading session, the Nasdaq fell almost 1%, hurt by concerns about the AI boom after a report said ⁠OpenAI had fallen short of its goals for new users and revenue in recent months. The rise in storage demand also comes alongside a surge in memory prices, as power-hungry data centers use a significant portion of high-bandwidth memory to store and process massive amounts of information. The shortage of memory chips has left companies scrambling to find hardware that can aid their AI efforts and store data, benefiting companies such as Seagate that make physical hard drives.

Jim Cramer Highlights Seagate's 'Smart Moment' -- How AI FAQs Reveal 'Gigantic Data' Needs And Strong Dema

The 'Smart Moment' And Agentic AI Following Seagate's latest earnings call, Cramer took to X to highlight a specific exchange regarding the future of AI data storage. "Smart moment on the Seagate call where they are asked to talk about use cases that use a lot of memory and can spiral into gigantic data sets: the process of FAQs," Cramer posted. He was referring to comments made by Mosely regarding the rise of Agentic AI. Mosley explained that AI-driven frequently asked questions are evolving from simple periodic queries into continuous, autonomous workflows. These intelligent agents "reference enormous data sets to draw your conclusion and you may actually create new data," driving an unprecedented need for mass capacity hard drives. Entering A Period Of 'Structural Growth' This AI-driven data explosion translated into a stellar financial quarter for the storage giant. Seagate reported quarterly revenue of $3.11 billion -- a 44% year-over-year increase -- and non-GAAP earnings per share of $4.10, comfortably beating Wall Street estimates. "We believe Seagate is entering a new era of structural growth as AI applications amplify data creation and support sustained storage demand," Mosley stated during the call. Reflecting this high conviction, management significantly raised its annual revenue growth target from the low-to-mid teens up to a minimum of 20% over the next few years. The company's profitability also reached record highs, generating $953 million in free cash flow. Cramer had earlier described STX's earnings as having an "insane beat" versus estimates. A High-Density Future To meet the market's accelerating needs, Seagate is aggressively scaling its high-density HAMR-based Mozaic platforms. With nearline capacity almost fully allocated through calendar 2027, the company is demonstrating immense pricing power. As the tech industry shifts toward heavy data retention for AI compliance and reasoning, Seagate's strategic focus on areal density ensures it will remain the backbone of this rapidly expanding "gigantic data" era. STX Stock Soars In 2026 STX stock has surged 110.26% year-to-date, while the Nasdaq Composite index advanced 6.15% over the same period. Furthermore, the stock was up by 159.65% in the last six months and 604.76% over the year. The stock closed Tuesday 2.82% lower at $579.03apiece. However, it was up 17.60% in premarket on Wednesday. Benzinga's Edge Stock Rankings indicate that STX maintains a strong price trend in the short, medium, and long terms, with a poor growth ranking. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Storage stocks jump as Seagate's upbeat forecast fuels confidence in AI spending

April 28 (Reuters) - Shares of storage companies jumped in extended trading on Tuesday, after strong revenue and profit forecasts from Seagate Technology signaled that spending by enterprises on artificial intelligence equipment will remain strong. Seagate's strong forecast and the late-day surge in storage stocks underscore investors' confidence that enterprise AI spending will sustain demand for data-storage equipment despite broader market concerns about the pace of AI adoption. Companies have funneled increasing amounts of money into data drives, hard disks and other digital storage as they rushed to upgrade their artificial intelligence models and infrastructure. Shares of Seagate soared 16% in extended trading, while Western Digital jumped 10%, Micron Technology climbed 3% and SanDisk rose 4%, adding a combined $60 billion to the four storage technology companies' market value. "AI is amplifying demand across existing applications such as video, where large cloud providers are integrating AI in the platforms to boost user engagement and revenue opportunities, driving new video creation and the need to store it," said Seagate CEO Dave Mosley on a post-earnings conference call. Seagate forecast fourth-quarter revenue of $3.45 billion, plus or minus $100 million, beating estimates of $3.16 billion, according to data compiled by LSEG. Executives at Seagate and rival Western Digital have previously said their capacity has been fully allocated and sold out through calendar 2026. In Tuesday's trading session, the Nasdaq fell almost 1%, hurt by concerns about the AI boom after a report said OpenAI has fallen short of its goals for new users and revenue in recent months. Nasdaq futures rose 0.2% following Seagate's report, showing that traders expect tech stocks to partly rebound in Wednesday's session. The rise in storage demand also comes alongside a surge in memory prices, as power-hungry data centers use a significant portion of high-bandwidth memory to store and process massive amounts of information. The shortage of memory chips has left companies scrambling to find hardware that can aid their AI efforts and store data, benefiting companies such as Seagate that make physical hard drives. Ahead of Tuesday's report, Seagate shares had already more than doubled, year to date. (Reporting by Zaheer Kachwala in Bengaluru; additional reporting by Noel Randewich; Editing by Sriraj Kalluvila)