Seagate Stock Surges 153.4% in 6 Months: Will the Uptrend Continue?

Seagate Technology Holdings plc STX has skyrocketed 153.4% in the past six months, outperforming its Computer - Integrated Systems industry’s growth of 36.1%. It has also outperformed the Zacks Computer and Technology sector surge of 30.6% and the S&P 500 composite’s growth of 17.2%. The stock has risen 66.2% in the past three months.Image Source: Zacks Investment ResearchThe company is gaining from higher demand for mass capacity storage solutions as well as its expansion into the SSD storage space.Seagate closed the last session at $221.23, down from its 52-week high of $221.66. Does this recent pullback indicate a buying opportunity? Let us evaluate the pros and cons of STX and decide the best course of action for your portfolio.STX’s Key Drivers of GrowthSeagate is witnessing mass capacity demand improvement, with nearline cloud demand picking up pace. In the last reported quarter, mass capacity revenues surged 40% year over year, owing to stronger nearline cloud demand and increasing nearline enterprise sales. In the June quarter, nearline drives accounted for 91% of the total mass capacity exabytes shipped. Cloud investment cycles and the scale-out of AI-ready data center infrastructure are driving strong demand for mass-capacity storage.Also, cloud service providers are focusing more on the development and deployment of AI applications while building cloud infrastructure. Cloud service providers (CSPs) are increasingly focusing on developing and deploying AI applications while expanding their cloud infrastructure. Seagate believes HDDs will be crucial in supporting these stages of AI adoption and expects HDD demand to accelerate further.A major growth catalyst for Seagate is the rollout and scaling of its HAMR technology, designed to boost areal density and enable next-generation storage solutions. Management highlighted the successful ramp of its HAMR-based Mozaic products, with three major cloud customers already qualified and more in progress.Seagate Technology Holdings PLC Price and Consensus Seagate Technology Holdings PLC price-consensus-chart | Seagate Technology Holdings PLC QuoteApart from this, Seagate has been expanding into the SSD storage market. SSDs are faster and more energy efficient than traditional hard drives. These occupy less space and are thus more suitable for mobile computing devices. SSDs are being used in servers due to lower latency, which facilitates faster response to real-time applications. E-commerce and financial enterprises need a quicker response time. Thus, data centers serving these clients are also opting for SSDs. The secular growth of digital data and modest growth in the TAM are contributing to higher demand for storage in general, and especially for SSDs. The SSD segment’s growth potential is a major positive for Seagate.Recently, Seagate launched the LaCie Rugged SSD4, a compact external SSD designed for creators working beyond the confines of a traditional studio. Designed for filmmakers, photographers and audio professionals who demand reliable, high-performance storage, the Rugged SSD4 offers blazing speeds of up to 4000MB/s read and 3800MB/s write. Its USB 40Gbps port enables fast file transfers and seamless direct work from the drive across Mac, iPad, PC and mobile devices.Optimistic OutlookFor the first quarter of fiscal 2026, Seagate anticipates revenues of $2.5 billion (+/- $150 million). At the midpoint, this indicates a 15% year-over-year improvement. Non-GAAP earnings are expected to be $2.3 per share (+/- 20 cents). It expects the non-GAAP operating margin to grow in the mid-high 20s percentage range of revenues.STX Faces a Few ChallengesSeagate is grappling with high debt, which remains a concern. As of June 27, 2025, cash and cash equivalents were $891 million, while long-term debt (including the current portion) was $5 billion. While this supports expansion, reliance on debt increases leverage and financial risk if returns are delayed. Also, Seagate faces tough competition from other players in the data storage industry, including HDD and SSD manufacturers. It also faces competition from companies engaged in offering storage subsystems, like electronic manufacturing services and contract electronic manufacturing. In addition to stiff competition, the ongoing global macroeconomic troubles and volatile supply-chain dynamics are likely to remain concerns.How Should Investors Play STX Stock?With a Zacks Rank #3 (Hold), STX appears to be treading in the middle of the road. Solid cloud demand with HAMR ramp-up boosting the long-term outlook bodes well for Seagate. However, a high debt load , stiff rivalry and unfavorable macroeconomic environment pose concerns.For investors already holding shares, the story remains compelling, but for new entrants, it may be wise to wait for a better entry point.Stocks to Consider From the Computer and Technology SpaceSome better-ranked stocks from the broader technology space are Micron Technology, Inc. MU, Hewlett Packard Enterprise Company HPE and International Business Machines Corporation IBM. MU sports a Zacks Rank #1 (Strong Buy) while HPE and IBM carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Micron’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.7%. In the last reported quarter, Micron delivered an earnings surprise of 20.13%. Its shares have surged 68.1% in the past year.Hewlett Packard earnings beat the consensus estimate in three of the trailing four quarters while missing in one, with the average surprise being 4.39%. HPE’s long-term earnings growth rate is 6.3%. Its shares have jumped 31.3% in the past year.IBM’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6.29%. In the last reported quarter, IBM delivered an earnings surprise of 6.06%. IBM’s long-term earnings growth rate is 5.8%. Its shares have inched up 15% in the past year.Free Report: 3 Software Stocks Poised to SkyrocketSoftware stocks are poised to catapult higher in the coming months (and years) thanks to several factors, especially the explosive growth of AI. Zacks' urgent report reveals 3 top software stocks to own right now.Access the report free today >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Business Machines Corporation (IBM): Free Stock Analysis Report Seagate Technology Holdings PLC (STX): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks