Seagate: Still Spinning Gold in ’26!

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Oy vey! Seagate Technology (STX +0.79%) – now there’s a stock! It went absolutely bonkers on Wednesday, leaping around like a caffeinated kangaroo. Twenty percent! In a single day! It’s like they discovered the secret to eternal youth…or, you know, just made a whole lotta money. And let me tell you, folks, this isn’t some flash in the pan. This is a company that, in 2025, returned a positively unbelievable 225%—enough to make even Croesus blush. And year-to-date? A ridiculous 61%! I tell ya, I haven’t seen numbers like this since I tried to count all the pigeons in Times Square.

Over the last twelve months, this hard drive behemoth has climbed a stately 343%. And the best part? It doesn’t look like it’s slowing down. It’s like watching a runaway train…a train filled with data, of course. And thankfully, not filled with clowns. Although…a clown car full of hard drives…now there’s an idea!

Seagate Reported Blowout Earnings (A Schmear of Good News!)

Seagate and Western Digital…those two! They were the kings of the S&P 500 last year, each returning over 200%. It’s a duopoly, see? Like Abbott and Costello, but with…magnetic storage. They control about 80% of the market for high-capacity hard drives—the stuff that keeps all your cat videos and questionable online purchases safe and sound. This puts them in a prime position to capitalize on this whole AI boom. Everyone needs somewhere to store all that artificial intelligence, right? It’s not like it lives in the cloud on a tiny little bagel.

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In the fiscal second quarter, Seagate raked in $2.8 billion in revenue—a 22% jump! Beat the estimates, naturally. Net income surged 76% to $593 million—enough to buy a small country! Or at least a very nice deli. Adjusted net income rose 62% to $433 million. The analysts were expecting $2.84 a share? Feh! Seagate delivered $3.11! It’s like they’re printing money…digitally, of course.

And get this: record gross margin (41.6%) and operating margin (29.8%). These numbers are so good, they’re practically illegal! I’m half expecting the SEC to show up with a warrant. But hey, what’s a little regulatory scrutiny when you’re making this kind of dough?

Looking ahead, Seagate expects revenue of $2.9 billion for the next quarter, blowing past estimates of $2.79 billion. And adjusted earnings per share? $3.40, give or take twenty cents. The analysts were expecting $3.01? Please! It’s like bringing a slingshot to a laser fight.

Seagate Has More Room to Run (Don’t Worry, It’s Not a Marathon!)

Wall Street, naturally, is losing its collective mind. Ten different analysts have boosted their price targets, with Morgan Stanley leading the charge at $468 a share and Cantor Fitzgerald right behind at $500. It’s a feeding frenzy! They’re practically throwing money at this stock. I’m starting to think I should have bought a yacht instead of a sensible sedan.

Seagate’s Chairman and CEO, William Mosley, said demand is “exceptionally strong” and that orders are booked solid for 2026. And they’re already taking orders for 2027! This isn’t a company that’s worried about a slowdown. They’re practically swimming in demand. I’m picturing them building a giant vault to store all the orders.

Mosley also said cloud customers are discussing their demand projections for 2028! Supply assurance is their top priority. That’s a fancy way of saying, “We need hard drives, and we need them now!” It’s a beautiful thing, really. A perfect symbiotic relationship. The cloud needs Seagate, and Seagate needs the cloud. It’s like a romantic comedy…with magnetic platters.

The hyperscale data center market is expected to grow at a compound annual rate of 25% through 2030. That’s a lotta data, folks! And Seagate, with its duopoly, is perfectly positioned to reap the benefits. It’s like owning the only two gas stations on the highway. Genius, pure genius!

Seagate’s trailing twelve-month price-to-earnings ratio is a bit high at 44, but its forward P/E is a more reasonable 31. It’s probably sustainable, especially compared to other AI highfliers. Investors should keep an eye on that, though, especially after Wednesday’s surge. Valuation is important, even when you’re dealing with a company that’s firing on all cylinders.

Seagate is firing on all cylinders, and it should keep rolling in 2026 and beyond. Just keep an eye on the valuation, and maybe, just maybe, consider buying a yacht.

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2026-01-29 18:32