"HDD Renaissance" sweeping the globe! Seagate (STX.US) strong performance driving the storage sector to skyrocket. Capacity nearly sold out by 2027.

Seagate (STX.US), one of the three leading storage product companies in the United States alongside SanDisk and Western Digital Corporation, announced its quarterly performance and future outlook on Wednesday morning Beijing time. The data shows that the global technology companies are experiencing explosive demand for high-performance nearline HDDs and enterprise-level data center SSDs, underpinning the strong performance and outlook of this storage giant, which has exceeded Wall Street analysts' expectations. Seagate's strong growth performance, which far surpassed expectations, can be seen as a comprehensive strengthening of the three major storage chip original manufacturers - Samsung, SK Hynix, and Micron Technology, Inc., as well as Western Digital Corporation and SanDisk, leading the so-called "storage super cycle" of prosperity and growth. Seagate's performance has single-handedly driven a surge in the stock market's storage sector after taking a heavy blow on Tuesday. Seagate's management has given strong performance forecasts and the significant rise in the storage sector after-hours trading highlights investors' increasingly bullish confidence - that despite broader market concerns about the actual adoption speed of corporate AI, major tech giants' AI data center construction processes are showing strong support for the exploding demand for data storage devices. In the past, the market has viewed HDDs (mechanical hard drives) as "old technology" gradually being replaced by SSDs, but the AI infrastructure craze has seen data centers once again requiring massive, low-cost, long-term storage capacities; the so-called "HDD Renaissance" is not just empty rhetoric but a recognition of HDDs once again becoming a core asset for AI data center massive capacity needs. In terms of financial outlook, Seagate expects cumulative revenue for the fourth quarter to be approximately $3.45 billion, with a fluctuation of $100 million; according to data compiled by LSEG, this forecast is significantly higher than analysts' average estimate of $3.16 billion. This forecast has been continuously revised upwards since the beginning of the year when the global stock market's storage sector saw a surge in prices. The adjusted EPS guidance falls within the $5 range, significantly higher than the market's expectations of around $3.95. Seagate and its main HDD mechanical hard drive competitor Western Digital Corporation had previously stated that their production capacity had been fully allocated and sold out until the year 2026. Seagate Technology Holdings PLC's CEO announced during the performance conference call that the storage product was entering a "structural growth new era," with the future years' annual revenue growth target being raised from "low to mid-double digits" to at least 20%, shouting out that data center-level nearline hard drive capacity is nearly sold out until 2027, with capacity almost fully allocated until the end of 2027. In the third quarter of the 2026 fiscal year ending on April 3, Seagate's total revenue was approximately $31.1 billion, a 44% year-on-year increase, exceeding Wall Street analysts' average expectation of $29.6 billion. Adjusted earnings per share (EPS) under non-GAAP standards were $4.10, a significant increase from $1.90 in the same period last year, and substantially surpassing the market's expectation of $3.51. GAAP EPS was $3.27, compared to $1.57 in the same period last year. Non-GAAP gross margin reached 47%, up 480 basis points from the previous quarter; non-GAAP operating margin expanded to 37.5%, up 560 basis points from the previous quarter. The revaluation of hard drives by the capital market is due to the fact that AI does not only consume GPUs and HBMs but also creates a demand for long-term, low-cost, high-capacity data storage. Training data, inference logs, multimodal outputs, video generation, autonomous driving data, enterprise AI workflows, and intelligent long-term memory will turn data from "one-time calculations" into "continuous generation, continuous archiving, continuous retrieval." Seagate CEO Dave Mosley refers to this as the "structural growth new era," with the core focus being on the amplification of massive AI models, high-definition video generated by AI applications, which in turn drive nearly infinite storage demands in cloud platforms and data centers. Seagate's strong financial report and guidance undoubtedly demonstrate that enterprise AI spending has not waned despite rumors of underperformance among OpenAI users or revenue targets not being met; on the contrary, the AI wave has completely reshaped the value of hard drives, with data centers preemptively locking in storage capacity for the unprecedented "data deluge" of the AI era. For investors, the real significance of the HDD duopoly is not the resurgence of traditional PC hard drives but the fact that AI data centers are making mechanical hard drives once again the bottleneck assets of AI cloud computing infrastructure. The AI data deluge is driving storage demand! Seagate's strong performance and outlook ignite the storage sector As major tech giants and AI application leaders such as OpenAI and Anthropic rush to upgrade their artificial intelligence models and build large-scale AI computing infrastructure, they have been increasingly investing substantial funds in HBM, eSSD, HDD mechanical hard drives, and other high-performance digital storage devices. In the exponentially expanding AI training/inference systems, AI corpora, retrieval libraries (RAG corpus), observation data (logs/traces/telemetry), compliance retention, and backups all ultimately need to land at the lowest TCO capacity layer. Therefore, AI data centers are increasingly inclined to use relatively few SSDs for caching/hot layers and use massive HDDs with TCO advantages for capacity/cold-temperate layers. Driven by the strong performance and outlook, Seagate's share price surged over 18% in after-hours trading, leading to a significant after-hours increase of 10% in Western Digital Corporation's shares (WDC.US). Leading American DRAM/NAND storage chip manufacturer Micron (MU.US) saw its stock price rise over 4%, while the SSD storage chip leader (SNDK.US) saw an increase of over 5%. After the earnings report release, the combined market value of these four leading American storage companies increased by $60 billion in after-hours trading. Prior to the latest quarterly earnings report, Seagate's share price had risen by over 110% since the beginning of the year. Global SSD storage leader SanDisk's stock price has surged over 300% since the beginning of 2026, significantly outperforming global stock market benchmark indices, with a total market value approaching $160 billion. Throughout 2025, SanDisk's share price skyrocketed by an astonishing 580%; this year, driven by the nearly limitless demand for storage chips brought on by the AI infrastructure craze, it continues to play out a "global storage chip epic" unparalleled in the global stock market. Seagate's CEO Dave Mosley stated during a post-earnings conference call, "AI is amplifying the demand in existing application areas, such as high-definition videos generated by AI. Large cloud service providers are integrating cutting-edge AI technologies into platforms on a large scale to enhance user engagement and new revenue opportunities, driving exponential growth in new video creations and the storage of these contents." During normal trading hours on Tuesday, the Nasdaq 100 index, known as the "global tech stock barometer," fell by nearly 1%, with the core reason being a report stating that OpenAI had failed to meet its earlier targets for new users and revenue growth in recent months, leading to market concerns about the global AI boom and the monetization path of AI. After Seagate's strong earnings report was released, Nasdaq 100 stock index futures reversed from a decline to a rise of over 0.5%, indicating that traders expect the dominant market value power of leading technology stocks in the AI computing industry to rebound during Wednesday's trading hours driven by Seagate's incredibly strong earnings growth expectations. The "storage super cycle" is expected to continue until 2030! The golden age of HDD has arrived A recent research report by the analyst team led by star analyst Ben Reitzes at Melius stated that the artificial intelligence boom will drive continuous strong growth in storage chip demand until the end of this decade (2030). According to market research firm Counterpoint Research statistics, the storage market has entered a "super bullish" or "super cycle" phase, with current supply and pricing significantly exceeding the historic highs during the 2018 cloud computing boom. Since 2026, DRAM/NAND storage chips have continued to soar, with the latest memory pricing survey by research firm TrendForce showing an estimated 58%-63% increase in overall general DRAM pricing in the second quarter of 2026 (previously anticipated to rise by 93% to 98% in Q1), driven by AI training/inference and widespread data center-related demand. The effects of price increases are pervasive across the entire product line; it is projected that in the second quarter, overall contract prices will see a significant increase of 70%-75% on top of the nearly 100% rise in prices in the first quarter. With the explosive launch of Anthropic's Claude Cowork and autonomous task execution tools like OpenClaw in 2026, major financial institutions such as Morgan Stanley believe that the AI computing investment narrative is shifting from a focus on "AI GPU/ASIC single-point computing power competition" to "AI intelligent agent-driven artificial intelligence full-stack systems." In this transition of the AI investment narrative, data center CPUs and storage chips may emerge as the biggest winners. In other words, the AI computing bull market is expanding further from the "AI chip computing system" to central processors and "data storage base." GPUs are responsible for generating intelligence, HBM/DRAM for high-speed transfers, enterprise-level NAND/eSSD for hot data and cache, and HDDs for the long-term archiving of massive volumes of cold/temperate data. As the global AI infrastructure wave transitions from "training clusters" to "continuous inference, multimodal generation, and intelligent agent operations," the more data there is, the longer the retention period, and the more important the unit storage cost becomes; this shift positions Seagate from a traditional hard drive manufacturer to a scarce supplier of "capacity bases" for AI data centers. The logic behind Morgan Stanley's assertion that the "mechanical hard drive duopoly is undervalued" lies in the fact that HDD supply is more challenging to expand rapidly compared to DRAM/NAND. The HDD market is highly concentrated, with Seagate and Western Digital Corporation controlling the vast majority of nearline hard drive supply. There has been no large-scale greenfield expansion in the industry, with capital expenditure intensity far lower than semiconductor storage; at the same time, high-capacity routes like HAMR/Mozaic lower the cost per TB by increasing single disk capacity, allowing suppliers to raise prices while reducing costs. Morgan Stanley has included Seagate stock in its "preferred stock list," with the core logic being that AI data center demand and tight HDD supply and demand may extend the gap until 2028-2030. In terms of specific product lines, Seagate benefits most directly from nearline HDDs and HAMR/Mozaic high-capacity hard drive routes, rather than the resurgence of traditional PC hard drives. Nearline drives are used for large-capacity pooled storage in cloud data centers that correspond well to the data deluge of AI; HAMR/Mozaic, by increasing single disk density, pushes single disk capacities to the 40TB, 50TB level, enabling Seagate to dilute costs per TB in different proportions while selling higher-capacity, higher-value products to hyper-scale cloud providers.