Seagate (STX) Is Up 9.2% After Strong Earnings, Dividend Hike, and Buyback Update—What’s Changed

• Seagate Technology Holdings reported strong first quarter earnings with US$2.63 billion in sales and US$549 million in net income, and also announced a quarterly dividend increase, a share buyback update, and a privately negotiated exchange of US$500 million in 3.50% Exchangeable Senior Notes due 2028, all occurring ahead of early November 2025.
• This combination of higher profits, increased shareholder returns, and ongoing capital management initiatives highlights management’s confidence in the company’s financial position and future prospects.
• We’ll explore how Seagate’s earnings strength and the accompanying boost in dividend and buyback activity influence its investment case.

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Seagate Technology Holdings Investment Narrative Recap

To be a shareholder in Seagate Technology Holdings, you need to believe the company can maintain and grow its leadership in mass storage solutions amid evolving technology and robust demand from cloud and AI infrastructure growth. The latest debt exchange, alongside strong earnings and capital returns, does not materially change the most important near-term catalyst (continued hyperscale demand) or the biggest risk (competition from alternative storage technologies), but it reinforces the company's focus on balance sheet management. Among recent announcements, the first quarter earnings result stands out: Seagate reported US$2.63 billion in sales and US$549 million in net income, highlighting year-over-year growth and showing resilience as the company supports new technology rollouts. These earnings, paired with ongoing buybacks and a dividend increase, reflect a business benefiting from surging data storage needs and ongoing cloud infrastructure investment. However, investors should also weigh the risks around expanding competition from SSDs and QLC NAND, especially as...

Read the full narrative on Seagate Technology Holdings (it's free!)

Seagate Technology Holdings is projected to reach $12.0 billion in revenue and $2.5 billion in earnings by 2028. This outlook assumes a 9.5% annual revenue growth rate and a $1.0 billion increase in earnings from the current $1.5 billion.

Uncover how Seagate Technology Holdings' forecasts yield a $277.25 fair value, in line with its current price.

Exploring Other Perspectives

Four individual fair value estimates from the Simply Wall St Community range from US$97 to US$363.98 per share. As you review these opinions, keep in mind that the biggest risk currently is market competition from new storage technologies, which could influence Seagate's earnings and future positioning.

Explore 4 other fair value estimates on Seagate Technology Holdings - why the stock might be worth as much as 30% more than the current price!

Build Your Own Seagate Technology Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Seagate Technology Holdings research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Seagate Technology Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Seagate Technology Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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