Seagate Expertise simply handed the AI infrastructure commerce a much-needed win, and it got here from exhausting drives, an unlikely nook of the market.
Seagate’s shares had slid roughly 8% into Tuesday’s print as buyers had soured on stretched AI valuations throughout chip and storage names. Nevertheless, Seagate’s fiscal fourth-quarter outcomes flipped that temper nearly in a single day.
A Beat That Silences the Doubters
Income climbed 48% 12 months over 12 months to $3.63 billion, beating Wall Avenue’s estimate close to $3.5 billion. Non-GAAP earnings per share got here in at $5.71, nicely above the $5.10 analysts anticipated.
That hole issues as a result of it reveals Seagate isn’t simply promoting extra drives. It’s making way more revenue on each. Non-GAAP gross margin backs that up, leaping to 52.7% from 37.9% a 12 months earlier.
Seagate additionally banked a file $3.1 billion in free money movement for the total fiscal 12 months, money it could possibly use to pay down debt, reward shareholders, or reinvest in its AI storage push.
CEO Dave Mosley credited the outcomes to sturdy cloud demand.
“Our efficiency is being pushed by sturdy cloud information heart demand and disciplined execution, and we see the momentum persevering with in 2027,” Mosley mentioned.
Administration’s steerage beat expectations too. Seagate expects $4.1 billion in income subsequent quarter, nicely above analyst estimates close to $3.8 billion.
Why It Issues Past Storage
The beat lands proper as reminiscence chip shares wobble on fears the AI buildout is overheating. Even SK Hynix and Samsung’s chip offers haven’t stopped that slide. Seagate’s outcomes argue the underlying demand for AI-driven information storage nonetheless holds, at the same time as sentiment across the shares turns shaky.
Seagate’s subsequent quarter, and whether or not it hits that $4.1 billion goal, will present if this confidence sticks.
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