Seagate Technology on Tuesday projected quarterly revenue and adjusted earnings that topped Wall Street expectations, attributing the stronger outlook to accelerating demand for mass storage driven by the rapid expansion of AI infrastructure. The company, which is based in Singapore, said its shares - already up more than twofold year-to-date - climbed more than 8% in after-hours trading on the update.
Management pointed to its heat-assisted magnetic recording, or HAMR, as a key enabler. HAMR uses tiny lasers to enable greater data density on each disk, allowing Seagate to increase storage capacity per drive without the need to construct expensive new manufacturing lines. That technical approach is central to the company's ability to supply higher-capacity drives into the AI and cloud markets.
For the first quarter, Seagate provided a revenue guide of $4.1 billion, plus or minus $100 million. That range sits above the LSEG-compiled average analyst forecast of $3.75 billion. The company also expects adjusted earnings of $7.30 per share, plus or minus $0.20, ahead of the average analyst projection of $5.80 per share.
CEO Dave Mosley framed the demand outlook succinctly: "As AI accelerates data generation and its value, we see durable long-term demand for mass capacity storage." The company said this dynamic has allowed it to raise pricing as hyperscale cloud customers expand the storage infrastructure needed to support generative AI workloads.
Seagate closed out the prior fiscal quarter with a robust performance. Fourth-quarter revenue rose 48.5% to $3.63 billion, above consensus estimates of $3.49 billion. Adjusted profit for that quarter was $5.71 per share, exceeding expectations of $5.09 per share.
The outlook and recent quarterly results highlight how an upswing in demand from large cloud operators building AI-ready storage can translate to improved top-line growth and pricing power for suppliers of high-capacity hard disk drives. Investors reacted strongly to the guidance, reflecting the market's focus on capacity supply dynamics and unit economics in the storage sector.
Note: The company provided specific revenue and earnings guidance ranges and cited product and market drivers as described above.