Seagate Technology Holdings plc (STX) has seen its stock surge by 241.8% over the past year, significantly outperforming the Zacks Computer-Integrated Systems industry (95.3%), the Zacks Computer & Technology sector (29.7%), and the S&P 500 (21.9%). This robust performance places Seagate among the top-performing names in the broader market, driven by increasing industry demand for data storage solutions.
Key factors propelling this growth include rising demand for high-capacity storage, particularly due to trends in artificial intelligence (AI) and cloud computing, along with tight supply in the hard disk drive (HDD) market. The company is advancing its HAMR (heat-assisted magnetic recording) technology, which is set to dominate HDD market share by 2026, as it anticipates increasing production and qualification of its 36TB and upcoming 44TB offerings with major cloud service providers.
For the fiscal second quarter, Seagate expects revenues of $2.7 billion (+/- $100 million), a 16% increase year-over-year. The company has raised its quarterly dividend by about 3% to $0.74 per share, reflecting strong cash flow and commitment to return capital to shareholders. However, Seagate faces challenges from competition, a high debt burden, and macroeconomic headwinds, while striving for improved financial flexibility moving forward.
