Seagate Technology (STX +19.14%) experienced a most agreeable surge yesterday, a phenomenon attributable, it seems, to the insatiable modern appetite for storing utterly trivial data. One might have thought the world adequately cluttered, but no.
By the close of trading, the stock had ascended by a gratifying 19%, a figure which, while not quite matching the excesses of the dot-com era, is nonetheless respectable in these increasingly dreary times.
The Data Horde
Revenue for the second fiscal quarter reached $2.83 billion, a 22% increase. One pictures vast server farms, humming with the weight of cat videos and redundant spreadsheets. The chief executive, Dave Mosley, observed that artificial intelligence is driving demand, which is, naturally, the explanation for everything these days.
An exabyte, we are informed, is a billion gigabytes. A unit of measurement designed, presumably, to induce a sense of existential dread.
With supply conveniently constrained and demand predictably unrestrained, Seagate is enjoying a period of unearned prosperity. The company, a leader in mass-capacity storage, is profiting handsomely from our collective digital hoarding.
Gross margin improved by 6.7 percentage points to 42.2%, and operating margin by a further 8.8 points to 31.9%. These figures, while impressive, are merely symptoms of a larger, more disturbing trend.
Adjusted earnings per share leaped 53% to $3.11. A windfall, no doubt, destined to be squandered on executive bonuses and yet more server farms.
A Future of Expanding Excess
Management anticipates revenue of roughly $2.9 billion for the third fiscal quarter, with adjusted earnings of $3.40 per share. Mr. Mosley reports sustained demand for “high-capacity nearline drives” from cloud data centers, and a “continued improvement” from the “enterprise edge.” One gathers this is industry jargon for “more of the same.”
Based on their “build-to-order pipeline,” these positive trends are expected to continue. A bleak prospect, perhaps, for those of us clinging to the notion of digital minimalism, but a decidedly profitable one for Seagate.
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2026-01-29 04:22