Seagate (STX) Is Up 9.3% After Surprising Earnings, Dividend Hike and Strong AI-Driven Guidance – Has The Bull Case Changed?

• Seagate Technology Holdings recently reported quarterly results that exceeded analyst expectations, raised its quarterly dividend by 3% to US$0.74 per share, and issued robust guidance for the next quarter driven by strong demand for its high-capacity storage solutions and AI applications.
• Key business shifts included a continued transition to HAMR-based Mozaic drives, an operational focus on data center and Edge IoT end markets, and announcements of share repurchases and changes to the company’s equity incentive plans during its 2025 Annual General Meeting.
• We'll now examine how Seagate's better-than-expected financial performance and dividend increase reinforce its investment narrative and growth outlook.

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Seagate Technology Holdings Investment Narrative Recap

To believe in Seagate Technology Holdings as a shareholder today, you need to trust that growing demand for high-capacity storage and AI data workloads will continue to drive revenue and margin expansion, particularly as the company transitions to advanced HAMR technology. The recent beat on earnings and higher dividend reinforce confidence in this outlook, though upcoming tax changes tied to the Pillar 2 global minimum tax remain a significant short-term risk; the news had no material impact on this risk for now. Among the recent announcements, the raised corporate guidance for the next quarter stands out. Seagate now expects second-quarter revenue of US$2.70 billion (plus or minus US$100 million), explicitly factoring in the imminent impact of the new global minimum tax regime, making management’s growth visibility particularly relevant against the backdrop of evolving regulatory constraints. Yet, while the company’s positive outlook grabs attention, investors should not overlook the potential bite of rising tax expenses starting next year if...

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

Seagate Technology Holdings is projected to achieve $12.0 billion in revenue and $2.5 billion in earnings by 2028. This scenario assumes annual revenue growth of 9.5% and an increase in earnings of $1.0 billion from the current $1.5 billion.

Uncover how Seagate Technology Holdings' forecasts yield a $241.10 fair value, a 6% downside to its current price.

Exploring Other Perspectives

Four members of the Simply Wall St Community shared fair value estimates for Seagate from as low as US$97 to as high as US$369 per share. While many are focused on new growth drivers like mass capacity storage and AI, the looming changes in global tax policy could test future earnings.

Explore 4 other fair value estimates on Seagate Technology Holdings - why the stock might be worth less than half 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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