STX Stock Rallies As Much As 9% After-Hours On Q4 Beat, Raised Guidance, And Locked-In 2028 Demand

Seagate crushed Q4 estimates with record profits and issued strong guidance fueled by surging AI and hyperscale cloud storage demand.

• CFO Gianluca Romano noted the gap between supply and demand has widened, enabling stronger pricing.
• CEO Mosley said Seagate expects fiscal 2027 revenue growth to “outpace” 2026’s performance, with sequential revenue, margin and cash-flow expansion every quarter.
• Goldman Sachs analyst James Schneider kept a Buy rating and $960 price target on Seagate following the results.

Shares of Seagate Technology Holdings plc (STX) reversed a sharp regular-session decline and climbed as much as about 9% in after-hours trading on Tuesday, after the hard-disk drive maker reported fiscal fourth-quarter results that substantially exceeded expectations and issued strong guidance for the current quarter owing to surging demand from hyperscale cloud providers and artificial-intelligence workloads.

Record Profitability In Fiscal Q4

Seagate posted revenue of $3.629 billion for the quarter ended July 3, up 48% from $2.444 billion a year earlier and ahead of the company’s prior guidance. Data-center revenue, the primary growth engine, rose 57% year-over-year to $2.933 billion and accounted for 81% of total sales. Seagate shipped 218 exabytes of hard-drive capacity, up 34% from a year earlier.

Adjusted diluted earnings per share came in at a record $5.71, more than double the $2.59 reported a year earlier and well above Wall Street consensus estimates of $5.09.

“Seagate’s strong fourth quarter exceeded our expectations… driven by robust cloud data center demand,” said CEO Dave Mosley. “We see the momentum continuing in 2027.”

“Demand for mass capacity storage is strong and growing,” he said, adding data-center demand now represents about 90% of shipments, with most capacity already allocated into calendar 2028 and customers seeking extensions through 2029 and beyond. Cloud demand has delivered three years of sequential quarterly growth with “no evidence of a slowdown,” he added.

Full-Year Gains And Growth Trajectory

Fiscal 2026 revenue rose 34% to $12.2 billion, with adjusted EPS more than doubling to $15.58 and record free cash flow of $3.1 billion. Mosley said Seagate expects fiscal 2027 revenue growth to “outpace” 2026’s performance, with sequential revenue, margin and cash-flow expansion every quarter. Capital spending stayed disciplined at 4.7% of revenue in fiscal 2026 and is guided within the 4-6% target range for fiscal 2027.

Strong Guidance For Fiscal Q1 2027

Looking ahead, Seagate guided for fiscal first-quarter 2027 revenue of $4.1 billion, plus or minus $100 million, and adjusted diluted EPS of $7.30, plus or minus $0.20, above an estimated $5.87. Operating margin is expected to be near 50% of revenue, with operating expenses around $300 million.

CFO Gianluca Romano said the gap between supply and demand has widened, enabling stronger pricing. Price per unit of capacity rose 10% year-over-year in the June quarter, with the September guide implying closer to 20%.

“We take a little bit more pricing benefit” amid particularly strong demand, he said, while sticking to the company’s long-term pricing approach. Multi-year agreements lock in product details and pricing for all of calendar 2027.

Analyst Maintains Bullish Stance

Goldman Sachs analyst James Schneider kept a Buy rating and $960 price target on Seagate following the results. The firm believes the stock will trade higher on significant upside to both the quarter and guidance, despite elevated expectations heading into the print. Goldman said prior investor conversations highlighted bullish positioning based on strong capital-expenditure and storage demand trends from hyperscalers as well as tight supply dynamics in hard-disk drives.

Goldman Sachs’s price target on STX represents  potential upside of about 28% from the stock’s closing price on Tuesday.

How Did STX Retail Traders React?

On Stocktwits, retail sentiment around STX stock jumped from ‘bearish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘normal’ to ‘extremely high’ levels.

STX stock has gained about 170% year-to-date. 

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