Seagate Inventory Skyrockets 80% in 2025. Right here’s Why STX May Nonetheless Be a Steal

Seagate Know-how (STX) has been one of many top-performing S&P 500 Index ($SPX) shares of 2025. It has soared over 80% year-to-date. This vital rally is supported by the stable demand for the corporate’s merchandise, elevated investments in synthetic intelligence (AI) infrastructure, its enhancing leverage profile, and improved profitability.

Seagate is seeing surging demand for its mass-capacity storage merchandise. As cloud computing expands and knowledge facilities scale as much as help AI purposes, the demand for high-capacity laborious drives continues to soar. Seagate is well-positioned to capitalize on this chance. Its merchandise have change into important for hyperscale cloud suppliers and enterprises alike, making it a pure beneficiary of the AI-driven knowledge explosion.

The corporate’s financials mirror the stable demand tendencies. Seagate just lately closed fiscal 2025 on a stable notice. Income surged 39% in fiscal 2025, adjusted gross revenue practically doubled, and working revenue greater than tripled. This stable efficiency is pushed by its supply-demand alignment, tight price controls, and a concentrate on high-value merchandise.

Quarterly efficiency has been simply as spectacular. In the newest fiscal fourth quarter, income jumped 30% year-over-year, whereas adjusted gross margin expanded 170 foundation factors sequentially. This sustained enchancment displays the corporate’s shift towards a build-to-order (BTO) manufacturing mannequin, provide self-discipline, and dynamic pricing methods, all of which have helped the corporate preserve profitability even in aggressive markets.

Seagate is in a stable progress part, with no indicators of dropping momentum. It continues to see robust demand for its merchandise, a development that’s anticipated to drive each its financials and share value larger. Administration is optimistic about margin growth, due to the accelerating adoption of its next-generation Warmth-Assisted Magnetic Recording (HAMR)–based mostly Mozaic drives.

Trying forward, mass capability storage stays a key progress driver. Seagate is ramping manufacturing of its HAMR-based Mozaic merchandise and gaining traction with prospects at a formidable tempo. Three main cloud service suppliers have already certified these drives, with extra prospects transferring by the qualification course of easily. Demand from cloud suppliers is surging, and even the enterprise OEM market is displaying indicators of life, with nearline gross sales posting modest sequential good points. Administration expects this demand to carry regular within the months forward.