Seagate’s latest earnings report erased doubts about AI infrastructure demand, sending the stock sharply higher after a recent dip. The company posted a 48% jump in revenue for its fiscal fourth quarter, hitting $3.63 billion and beating Wall Street's forecast of around $3.5 billion. Earnings per share soared to $5.71, well above the $5.10 expected by analysts.
This strong performance wasn’t just about selling more hard drives. Seagate’s profitability improved dramatically, with its non-GAAP gross margin expanding from 37.9% last year to 52.7% now, signaling better pricing power and operational efficiency.
Free cash flow hit a record $3.1 billion for the fiscal year, a solid buffer to reduce debt or fund further investment in AI-focused storage solutions. CEO Dave Mosley credited the results to steady demand from cloud data centers, projecting that this momentum will continue into 2027.
Strong Guidance Defies Broader Chip Sector Worries
Management also raised its outlook, expecting $4.1 billion in revenue next quarter, ahead of the $3.8 billion analysts forecast. This comes amid a shaky memory chip market where even giants like SK Hynix and Samsung face pressure despite big deals. Seagate’s figures suggest that the underlying need for AI-driven data storage remains solid, even as sentiment around the wider AI hardware sector cools.
The next quarter’s results will be closely watched to see if Seagate can sustain this upswing and prove that AI’s data appetite is not slowing down any time soon.
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