Seagate Technology Plc (STX) shares surged more than 13% in after-hours trading after the data-storage company reported fiscal third-quarter results and a forward outlook that blew past Wall Street estimates, citing immense demand from the artificial intelligence sector.
“We believe Seagate is entering a new era of structural growth as AI applications amplify data creation and support sustained storage demand,” Dave Mosley, Seagate’s chief executive officer, said in a statement. “Through disciplined execution, we are strategically positioned to capture these opportunities.”
The company posted an across-the-board beat for the quarter ending April 3. A key driver was margin expansion, which significantly outpaced expectations and contributed to the strong earnings upside.
Looking ahead, Seagate forecast fourth-quarter revenue of $3.5 billion and adjusted earnings per share of $5.00. Both figures were well ahead of analyst forecasts, which called for revenue of $3.1 billion and EPS of $3.92.
The blowout report validates the stock’s massive rally over the past year, fueled by the thesis that the AI boom requires unprecedented amounts of data storage. The results indicate that demand for Seagate’s high-capacity drives is so strong that the company has gained significant pricing power, with reports that its capacity is already fully allocated for calendar year 2026.
The positive results lifted the entire storage sector in late trading. Shares of rival Western Digital Corp. (WDC) gained more than 8%, while memory chip maker Micron Technology Inc. (MU) rose nearly 2%.
The guidance and strong free cash flow signal that management expects demand from AI data centers to continue accelerating. Investors will now watch the company’s next earnings call for confirmation that its record margin performance can be sustained into 2027.
This article is for informational purposes only and does not constitute investment advice.
