Seagate Technology Shares Advance on Strong Fiscal First Quarter Results

Seagate Technology Exceeds Fiscal First Quarter Expectations

U.S. equities saw a lift in the technology sector, with Seagate Technology (NASDAQ:STX) shares advancing following the announcement of fiscal first-quarter results that significantly surpassed Wall Street expectations. The hard-drive manufacturer reported robust financial performance driven by escalating demand for its high-capacity storage products, particularly those integral to artificial intelligence (AI) and data center infrastructure.

Detailed Financial Performance for Q1 2026

For the fiscal first quarter ended October 3, 2025, Seagate Technology reported an adjusted $2.61 per share, marking a 65% increase from the previous year and comfortably topping analyst estimates of $2.37 per share. Revenue for the period rose 21% year-over-year to $2.63 billion, also exceeding the consensus forecast of $2.55 billion. The company's profitability metrics demonstrated considerable improvement, with the adjusted gross margin reaching 40.1%, up from 33.3% in the year-ago quarter. The adjusted operating margin similarly expanded to 29%, a substantial increase from 20.4% in the prior year.

Operational efficiency gains were also evident in cash flow generation, with Seagate reporting $532 million in cash flow from operations and $427 million in free cash flow. In response to the strong results, competitor Western Digital (NASDAQ:WDC) also saw its shares move higher in extended trading.

Dave Mosley, Seagate's chair and chief executive officer, commented on the performance, stating, "Seagate delivered strong September quarter results, with revenue growth of 21% year-over-year and non-GAAP EPS exceeding the high end of our guided range. Our performance underscores the team's strong execution and robust customer demand for our high-capacity storage products."

Market Reaction and AI-Driven Momentum

Seagate shares initially rose 4% in recent trades following the earnings report, contributing to a broader rally that has seen the stock gain nearly 167% so far in 2025. This significant upward momentum is largely attributed to the increasing capital expenditure in AI infrastructure, which necessitates advanced, high-capacity storage solutions—a core offering of Seagate. The company's focus on delivering products essential for AI and data center growth has positioned it favorably within the current technological landscape.

Further demonstrating confidence in its financial health, Seagate's board approved a 3% increase in its quarterly dividend, raising it to $0.74 per share, returning $182 million to shareholders through dividends and share repurchases.

Analyst Perspectives and Future Outlook

Following the strong financial disclosures, leading financial institutions reaffirmed their positive outlooks on Seagate Technology.

Bank of America reiterated its Buy rating on STX, increasing its price target to $275 from $255, and adjusted its EPS and revenue estimates through 2028.

Wedbush maintained its Outperform rating, boosting its price target to $290 from $260.

Morgan Stanley also reiterated its Overweight rating, raising its target to $270 from $265.

Looking ahead, Seagate provided optimistic guidance for its fiscal second quarter of 2026, projecting revenue of $2.7 billion, plus or minus $100 million, and adjusted diluted EPS of $2.75, plus or minus $0.20. These projections comfortably exceed analyst expectations, which had anticipated revenue around $2.67 billion and adjusted EPS of $2.69, further solidifying investor confidence in the company's continued growth trajectory fueled by demand in the AI and data-centric markets.