By Nate Wolf
One of Wall Street's top performers over the last year was on track for another big day Wednesday.
Shares of Seagate Technology Holdings climbed 17% to $261.49 after the maker of data storage equipment breezed past quarterly earnings expectations and forecast another strong quarter. The stock was the top gainer in the S&P 500 Wednesday and was on pace for an all-time closing high, according to Dow Jones Market Data.
Seagate posted adjusted earnings of $2.61 a share for its fiscal first quarter, surpassing analysts' consensus call for $2.40. Revenue totaled $2.63 billion, up 21% from the prior year and above Wall Street's estimate of $2.55 billion.
The company also forecast revenue of $2.7 billion, plus or minus $100 million, for its fiscal second quarter. Analysts had expected $2.67 billion, per FactSet.
Seagate has soared more than 200% this year due to a surge in demand for data storage tied to artificial intelligence and cloud computing. That dynamic has allowed the company to raise prices and grow profits. And the first-quarter results showed those fundamentals remain in place, analysts said.
The print was "the bull case playing out in real-time," wrote Morgan Stanley analyst Erik Woodring in a research note. Higher prices and a shift toward higher-capacity storage drives helped widen Seagate's adjusted gross margin to a new record, which Morgan Stanley called the most impressive part of the report.
"Going forward, we expect similar tailwinds to drive gross margin higher, " Woodring said. The firm reiterated an Overweight rating and lifted its target on Seagate shares to $270 from $265.
Other factors coalescing in Seagate's favor include strong cloud-computing demand and the production of personal computers with AI chips, said Mark Miller of Benchmark Equity Research. The company's backlog for orders extends into 2027, too, Miller noted.
Benchmark raised its estimates for earnings growth in 2026 and 2027 in a research note following the earnings print. The firm reiterated a Buy rating and bumped its target price to $255 from $250.
Even the lone remaining bear on Wall Street had to hand it to Seagate. Susquehanna expects the total capacity of storage products shipped to peak to in the first half of calendar 2027 in what has historically been a very cyclical industry. After that point, Seagate's revenue and margin will decline, the firm projected.
But Mehdi Hosseini of Susquehanna Financial Group, in a research note, said the quarterly report showed "solid execution, no doubt."
Susquehanna maintained a Negative rating for Seagate stock -- the only Sell-equivalent rating among analysts polled by FactSet -- but nearly doubled its price target to $150 from $80.
Write to Nate Wolf at nate.wolf@barrons.com
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October 29, 2025 12:02 ET (16:02 GMT)
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