Seagate dips after 142% YTD surge, but AI-driven HDD boom keeps margins at records
TiernanRayTech · x · 2026-10-28
The author argues not to over-read Seagate's post-earnings selloff after a 142% YTD run. Q1FY27 fundamentals remain stunning: revenue $4.2B (+61% YoY), record 57.8% gross margin (+1,770bps YoY), record EPS $7.68, and $1.5B free cash flow (+246%). Data center drove 90% of exabyte shipments (198EB, +24% YoY) and $3.4B revenue (+63%), with cloud demand growing for 12 straight quarters. Nearline supply is allocated through CY28 with agreements extending to CY30, and the HAMR/Mozaic roadmap advances (8TB per disk demonstrated in lab). The takeaway: the AI wave remains a phenomenal opportunity for the two HDD duopolists, Seagate and WD.
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