Seagate reports strong results, offers robust guidance on surging AI demand

Investing.com -- Seagate Technology (NASDAQ: STX) reported second-quarter adjusted earnings that exceeded analyst expectations, while shares traded around 1% lower in after-hours trade.

Seagate shares climbed to a new record high on Tuesday, ending the session up 3.8% and trading around 6% higher at one point while investors were awaiting the company’s quarterly earnings release after the close.

The stock has nearly quadrupled over the past year, fueled by the rapid buildout of AI data centers, which has sharply increased demand for hard drives and other data storage equipment.

The data storage company posted adjusted earnings per share of $3.11 for the second quarter, up from $2.03 in the same period last year and above the consensus estimate of $2.83.

Revenue rose 22% year-over-year to $2.83 billion, surpassing analyst projections of $2.75 billion. The company’s adjusted gross margin improved to 42.2% from 35.5% a year earlier, exceeding the estimated 41%.

Seagate’s adjusted operating margin increased to 31.9% compared to 23.1% in the prior-year period, beating the 30.7% estimate. Free cash flow reached $607 million, a substantial increase from $150 million in the same quarter last year.

Looking ahead, Seagate provided guidance for its fiscal third quarter 2026, projecting revenue of $2.90 billion, plus or minus $100 million, and non-GAAP diluted earnings per share of $3.40, plus or minus $0.20.

These forecasts surpass analyst expectations, which had called for adjusted earnings per share of $3.01 on revenue of $2.79 billion for the upcoming quarter.

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