Key Factors
Seagate, the most important producer of arduous disk drives, is ushering within the subsequent technology of high-capacity HAMR expertise HDDs within the Mozaic 3+ with as much as 30 TBs, doubling the capability in the identical footprint.
Seagate reported a fiscal Q3 2024 EPS of 33 cents, beating consensus estimates by 4 cents, whereas revenues fell 11% YOY however rose 6%, and adjusted EBITDA doubled QOQ, indicating the restoration cycle could also be underway.
Cloud information heart demand is recovering as EBITDA margins expanded to 16.8%, up from 13.9% within the year-ago interval.
5 shares we like higher than Seagate TechnologyData storage gadget producer Seagate Know-how Holdings plc NASDAQ: STX hasn’t considerably benefitted from the synthetic intelligence (AI) growth. Its laptop and expertise sector rival Western Digital Co. NASDAQ: WDC had a dramatic 2024 reversal of fortune as losses of 46 cents reworked into earnings of 40 cents, and sagging revenues become a 23% YOY income spike. Seagate additionally noticed a spike in its backside line, not a lot from AI however from the restoration of cloud computing demand. This impacts Seagate essentially the most since 90% of cloud computing information facilities nonetheless depend on arduous disk drives (HDD) for information storage because of the bigger capability and cheaper prices in comparison with flash solid-state drives (SSD).
Get Seagate Know-how alerts:Signal UpThe Evolution of HDD Know-how
HDD is taken into account a legacy expertise. Even trendy laptops and desktops retail laptop programs are outfitted with SSDs attributable to their pace, reliability and non-moving components. Nonetheless, when large-scale information capability is required, HDDs nonetheless carry a heavy workload. Seagate has been a pioneer and innovator of HDD expertise. Whereas HDDs cannot compete with the pace of NAND flash-based SSDs, they rule supreme with regards to information capability and value. Seagate additionally produces SSDs, however they’re a fraction of the HDDs.
Mozaic 3+ HDDs with HAMR Know-how
Seagate has continued to push the capability envelope with its HAMR expertise, which is now powering its Mozaic line of HDDs. Mozaic 3+ drives can deal with 3.2 petabytes of knowledge over 6,000 hours with capacities exceeding 30 TBs and final greater than seven years. Seagate’s Exos 30 TB Mozaic 3+ drive for information facilities almost doubles the capability in the identical footprint. Seagate plans to ramp up capability to 50 TBs.

Every day Descending Triangle Sample
STX has a descending triangle breakout sample on its every day candlestick chart. The descending trendline fashioned at $101.26, capping bounce makes an attempt at decrease highs, falling in direction of the decrease flat-bottom trendline at $82.54, assembly on the apex level. The every day relative energy index (RSI) peaked its bounce try on the 50-band because it began to show again down. Pullback help ranges are at $82.54, $79.39, $74.52 and $70.31.
The Restoration Cycle Seems to be Underway
STXSeagate Know-how$85.81 -0.10 (-0.12%) (As of 05/1/2024 ET)52-Week Vary$54.47▼$101.26Dividend Yield3.26percentWorth Goal$94.53Seagate reported fiscal Q3 2024 EPS of 33 cents, beating analyst estimates by 4 cents. Revenues fell 11% YoY to $1.66 billion versus $1.68 billion. Nonetheless, sequential revenues rose 6% QoQ as non-GAAP EPS greater than doubled sequentially. Non-HDD revenues had been $178 million. Adjusted gross margins rose 250bps to 26.1%, which led to EBITDA margin growth to 16.8%, up from 13.9% within the year-ago interval. The restoration cycle is underway.
Seagate offered in-line fiscal This autumn 2024 steerage with EPS of fifty cents to 90 cents versus 61 cents analyst estimates. Revenues are anticipated to be between $1.7 billion and $2 billion versus the consensus estimates of $1.85 billion.
HAMR Delays Ought to End in Second-Half Surge
Seagate CEO Dave Mosely talked about a brief slowdown hiccup in current weeks however is making progress in direction of its first giant CSP buyer qualification. Regardless of the hiccup, the corporate nonetheless anticipated to ship a couple of hundred thousand HAMR-based Mozaic drives within the June quarter. This could meet the remaining exabyte demand by different present merchandise. The corporate plans to ramp up HAMR merchandise with its main hyperscale shopper within the second half of the yr. They may stay targeted on broadening out the certified clients of Mozaic merchandise.
Mosely commented, ”We have laid out a Mozaic roadmap with a transparent path to not less than 50 terabyte drives that gives clients TCO and sustainability advantages, together with decrease energy consumption and fewer required ground house on a per terabyte foundation. We’re scaling drive capability by aerial density good points quite than including heads and disks. As we execute on our product roadmap to 50 terabytes and past, we count on to incur minimal adjustments to our invoice of fabric prices and preserve low capital depth of between 4% and 6% of income.”
Analysts Stay Optimistic
Financial institution of America reiterated its Purchase score on Seagate with a value goal of $110. Analyst Wamsi Mohan commented that regardless of the HAMR hiccup, they proceed to see energy heading into fiscal This autumn 2024. Mizuho reiterated their Purchase score with a $100 value goal. Cantor Fitzgerald maintained a Impartial score however raised its value goal to $100 from $96.
Barclays was skeptical and maintained its Impartial score and $80 value goal. Analyst Tom O’Malley commented, “We expect that the delay is extra regarding than marketed and assume it odd that after a failed qualification, no matter motive, the timeline would not lengthen extra considerably.” 
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