Seagate’s Earnings Reality Check
Strong Growth, A Falling Stock
Seagate Technology (STX), the mass-capacity data-storage supplier, reported fiscal first-quarter results this afternoon. Revenue rose 61% to $4.23 billion, adjusted earnings per share nearly tripled to $7.68, and free cash flow reached $1.5 billion.
For its fiscal second quarter, management forecast revenue of $4.8 billion, plus or minus $100 million, and adjusted earnings per share of $9.20, plus or minus 20 cents.
The shares gained nearly 4% during regular trading, then reversed after the report. At 4:32 p.m. Eastern, STX was around $620 in after-hours trading, about 7% below its regular-session close.
The Order That Didn’t Fill
This morning, we proposed an earnings-focused trade on the stock after it had fallen about 30% over the preceding month. Zacks’ Earnings ESP (Expected Surprise Prediction) pointed to a potential earnings beat.
As the shares rose during the day, we left our entry limit unchanged. The new order didn’t fill. Keeping that limit kept us from adding the proposed exposure ahead of the after-hours selloff.
We still hold a separate, longer-dated Seagate trade from July.
The Buildout Keeps Delivering
The AI buildout keeps advancing, and earnings reports have been showing us where the spending is landing. In July, we highlighted ASML’s second-quarter results: AI demand was prompting customers to accelerate their capacity plans, and ASML planned to expand key production capacity by 30% in 2027.
In August, SiTime supplied another example. Its second-quarter revenue rose 127%, while communications, enterprise and data-center revenue climbed 181%. Demand was reaching specialized components throughout the AI infrastructure stack.
Waiting For The Next Setup
We’ll consider another Seagate trade if it qualifies under our screens and we can structure it at a compelling price.
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