Seagate (STX) | Top of the Stack — October 2026
All the numbers presented in the article are taken directly from our dashboards.
Seagate (STX) is a global provider of advanced data storage technology and solutions, with operations spanning Singapore, the United States, the Netherlands, and other international regions.
Incorporated in Dublin, Ireland—the company’s extensive product portfolio comprises enterprise-grade nearline hard disk drives (HDDs), solid-state drives (SSDs), and complete enterprise nearline systems, alongside specialized HDDs for video and imaging, and network-attached storage (NAS) drives.
Beyond these, Seagate also supports legacy systems with Mission Critical HDDs and SSDs. Its consumer-focused segment features external storage devices sold under popular lines such as Seagate Ultra Touch, One Touch, and Expansion, as well as the premium LaCie brand.
Their product range further extends to internal desktop and notebook drives, HDDs for digital video recorders (DVRs), high-performance gaming SSDs, and the Lyve edge-to-cloud platform, an innovative solution designed for managing and transferring vast amounts of data. Its clientele primarily consists of original equipment manufacturers (OEMs), distributors, and retailers.
Operations
From late 2025 to early 2026, Seagate continued the volume ramp of its first-generation heat-assisted magnetic recordings (HAMR) products under the Mozaic 3+ platform. High-capacity data-center supply remained largely allocated through calendar 2026 under long-term agreements with major cloud customers.
In March 2026, the company announced that its next-generation Mozaic 4+ platform—supporting capacities up to 44TB—had been qualified and entered volume production with two leading hyperscale cloud providers and additional customer qualifications progressing through the year.
For FY2026 (ended in early July 2026), the company reported revenue of $12.2B, up 34% YoY, and generated a record $3.1B in free cash flow, and the shipment of approximately 789 exabytes of hard-drive capacity for the full year, with data-center and nearline demand accounting for the large majority of volume.
By the end of the fiscal year, HAMR-based products represented roughly 40% of nearline exabyte shipments. During the year, the company also reduced debt by $1.4B and returned $810M to shareholders through dividends and share repurchases.
In the July–September 2026 period, fiscal first-quarter 2027 revenue was targeted to approximately $4.1B. Management noted that the vast majority of nearline capacity is already allocated into calendar 2028, with some customer discussions extending into 2029. The company expected Mozaic 4+ products to account for roughly half of all HAMR exabytes by the end of calendar 2026. The next-generation Mozaic 5+ platform remained on track for qualification shipments in late calendar 2027.
Valuation
Key Takeaways
Very strong average price performance over the projected period. ✔️
Elevated earnings per share growth. ✔️
Successful ramp of technology offerings into major cloud customers. ✔️
Seagate is among the top ten most overvalued companies on the market according to our model. More precisely, it places sixth on the S&P 500 and fifth on the Nasdaq at the time of writing.
Risks
Negative growth rate. ❌
Negative book value per share growth. ❌
Virtually no expansion in sales per share over the projected period. ❌
High cost of equity. ❌
Exceptionally high P/E ratio. ❌
The company has exhibited negative equity since Q1 ‘23, having rectified the numbers only very recently, in Q2 ‘26.
Sustained Performance & Conclusion
Variables include:
Conversion of nearline allocations into durable revenue. ⚠️
Continued ramp of Mozaic 4+ and timely qualification of Mozaic 5+. ⚠️
Maintenance of pricing power and margins as competitors potentially add capacity. ⚠️
Strong recent profitability and technology execution against weaker per-share growth in sales and book value are the crux of this valuation.
The breadth of the premium currently assigned by the market—especially compared to the fair value estimate produced by our model—leaves little room for shortfalls in execution, leaving the company quite vulnerable to any sustained softened demand in data-center usage, supply disruptions, or adecline in their technological offerings.
Best regards,
- The Intrival Team
