Why Seagate Stock Is Surging By Nearly 7% In Premarket
Baird analyst Tristan Gerra lifted the price target for the stock to $270 from $188, implying 21% upside.
- Seagate CEO Dave Mosely said the company’s performance underscores the team’s strong execution and robust customer demand for its high-capacity storage products.
- Baird analyst Tristan Gerra lifted the price target for the stock to $270 from $188, implying 21% upside.
- It is now the fourth-best-performing S&P 500 stock this year.
Seagate Technology Holdings Plc‘s (STX) stock climbed nearly 7% in Wednesday’s early premarket session after the storage devices solutions company reported a solid quarterly beat.
Thanks to a broader uptrend since the post-tariff lows in early April, Seagate stock has surged up nearly 163%. It is now the fourth-best-performing S&P 500 stock this year.
Seagate Receives Big Price Target Bump After Q1
Following the quarterly results released after the market closed on Tuesday, Baird analyst Tristan Gerra lifted the price target for the stock to $270 from $188, implying 21% upside from its Monday’s closing price of $223.
Baird retained an ‘Outperform’ rating and kept the company among its top three large-cap ideas, citing secular margin expansion and free cash flow (FCF) generation, strong artificial intelligence (AI)-related demand, and the company’s overall fundamental transformation away from commoditized offerings.
Gerra noted that margin expansion is ongoing, with the fiscal-year 2026 first-quarter margin exceeding the 50% target due to the pace of customer qualification and contract signing. He noted that revenue per terabyte (TB) has remained stable over the past several quarters despite a significant shift in the mix toward higher-capacity drives.
The management did not provide any indication of alleviation of current supply/demand imbalances for the next four quarters, with supply growth ahead contingent on the migration to Heat-Assisted Magnetic Recording (HAMR)-based, higher-capacity drives and no plans for unit capacity increases, Gerra said. Seagate also maintained its three-year compounded annual growth rate (CAGR) target of 20%.
The analyst noted that AI demand continued to accelerate, notably for video-related content.
What Retail Feels About Seagate Stock
On Stocktwits, retail sentiment toward Seagate flipped to ‘bullish’ by early Wednesday, up from ‘bearish’ a day earlier. The message volume increased notably to ‘extremely high’ levels.
One bullish watcher expected the stock to trade at least $240 by the end of the week.
Another user lauded the company for continued profit growth that came even before it raised prices on its products.
Seagate’s Headline Q1 Numbers, Outlook:
-Adjusted earnings per share (EPS): $2.61 Vs. $2.40 consensus (Fiscal.ai-compiled)
-Revenue: $2.63B Vs. $2.55B consensus
-Adjusted gross margin: 40.1%, a 2.2 percentage points sequential increase
CEO Dave Mosely said, “Seagate delivered strong September quarter results, with revenue growth of 21% year-over-year and non-GAAP EPS exceeding the high end of our guided range. Our performance underscores the team’s strong execution and robust customer demand for our high-capacity storage products.”
The CEO said the company is ramping shipments of its areal density-leading Mozaic HAMR products, which are now qualified with five of the world’s largest cloud customers. “AI is transforming how content is being consumed and generated, increasing the value of data and storage, and Seagate is well-positioned for continued profitable growth,” he added.
Segate’s board raised the quarterly cash dividend by 3% to $0.74, payable on Jan. 9, to shareholders of record, as of the close of business on Dec. 24.
For the second quarter, the company guided to adjusted EPS of $2.55 to $2.95, and revenue of $2.60 billion to $2.80 billion. Analysts, on average, estimate $2.70 and $2.68 billion, respectively.
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