Seagate Shares Surge as AI Infrastructure Drives Record Growth

Seagate Technology (STX) saw its stock price climb following a fiscal third-quarter report that highlighted the critical role of hard drive storage in the artificial intelligence build-out. The surge in AI applications has created an urgent need for massive data storage, allowing Seagate to leverage supply constraints to raise prices and expand margins. Financial results for the quarter ending April 3 were robust, with revenue rising 44% year-over-year to $3.1 billion. Adjusted net income soared 129% to $934 million, resulting in earnings per share of $4.10. Profitability improved significantly, with adjusted gross margins reaching 47%—an increase of more than 10 percentage points—while operating margins hit 37.5%. The company's balance sheet also saw improvement, generating $953 million in free cash flow. Seagate utilized $641 million of this liquidity to pay down existing debt, strengthening its financial position as it scales to meet demand. Looking ahead, Seagate provided a positive outlook for its fiscal fourth quarter, forecasting revenue of approximately $3.45 billion and adjusted earnings per share of $5.00. Both figures surpassed analyst projections. CEO Dave Mosley stated that the company is entering a 'new era of structural growth' as AI applications continue to amplify data creation and sustain storage demand.