Seagate Technology (STX) shares returned 232.5% in the twelve months ending October 2, 2026, outpacing the S&P 500’s 16.4% gain. Management had signaled the underlying driver, increased cloud storage demand, nearly a year before that surge began. On October 22, 2024, executives stated that product approval at their lead cloud customer was progressing well. They also noted sustained supply discipline, addressing both customer demand and internal capacity on the fiscal Q1 2025 earnings call.
Financial results aligned with those remarks. Seagate reported a 49.1% revenue increase in fiscal Q1 2025, a sharp acceleration from the 17.8% growth seen in the prior quarter. The company filed that report on October 25, 2024, eleven months before the major stock run commenced. Subsequent calls clarified the connection to cloud spending. In January 2025, management disclosed that revenue from nearline products, high-capacity disks sold to cloud customers, had almost doubled in the December quarter. By April 2025, executives explicitly stated that demand for mass capacity storage moves in line with cloud data center spending.
Margins expanded as demand grew. Seagate’s operating margin reached 23.8% in fiscal Q4 2025, up from 16.5% a year earlier. However, the path was not without friction. A production issue noted in January slowed revenue growth from the previous quarter. Additionally, reports in April 2025 highlighted tariff uncertainty as a potential risk to costs and growth.
By mid-2026, data centers accounted for the majority of Seagate’s business. In the June 2026 quarter, data center revenue totaled $2.9 billion out of $3.6 billion in total sales, representing a 57% year-over-year increase. The company’s operating margin over the latest twelve months stood at 35%, compared to 21% a year prior. This performance was not isolated; Western Digital shares returned 219% and Micron Technology shares returned 491% over the same period.
Demand remained strong as of July 28, 2026. Management guided September-quarter revenue to $4.1 billion, plus or minus $100 million, and stated that the vast majority of nearline output is committed to customers through calendar 2028 under long-term agreements. On October 2, 2026, Seagate shares fell following reports that Toshiba plans to double its hard disk capacity for AI data centers in fiscal 2027. Investors expressed concern that increased supply could erode Seagate’s pricing power. The company has not yet reported its September quarter results.