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Seagate Divests Lyve Cloud to Enhance Core Storage Focus
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Key Takeaways
Seagate sold Lyve Cloud to Wasabi, becoming a shareholder to refocus on mass-capacity storage.
Lyve Cloud move ensures customers gain a specialized platform with simplified pricing and global scale.
STX advances HAMR drives up to 3TB per disk, targeting higher capacities amid rising AI data demand.
Seagate Technology Holdings plc (STX - Free Report) has taken a strategic step to sharpen its focus on core mass-capacity storage by divesting its Lyve Cloud business to Wasabi Technologies. The deal also makes Seagate a shareholder in the fast-growing cloud storage provider. While financial details remain undisclosed, the transaction reflects Seagate’s intent to streamline operations and align resources toward rising global demand for large-scale data storage infrastructure.
Lyve Cloud, known for its strong enterprise security and compliance, is expected to deliver greater customer value through its integration with Wasabi, offering simpler pricing and broader global infrastructure. The move ensures that Lyve Cloud customers continue to receive high-quality service through a specialized and independent cloud storage platform. By selling the business to Wasabi, Seagate enables customers to benefit from a provider focused entirely on cloud storage innovation, while it concentrates on advancing its leadership in mass-capacity storage solutions.
The decision comes amid accelerating enterprise demand driven by artificial intelligence (AI), analytics, video applications and long-term data retention needs. As organizations handle data at petabyte scale, they are increasingly prioritizing cost predictability, operational simplicity and secure, high-performance storage environments. Seagate’s divestiture of Lyve Cloud aligns with evolving customer needs by integrating it into Wasabi’s purpose-built ecosystem. The combined platform also improves compatibility with key partners like Veeam, Rubrik and Commvault, helping reduce complexity in multi-vendor storage environments.
Seagate is focusing on advancing mass-capacity storage through its HAMR technology roadmap, which enables higher areal density and supports growing data requirements. The company is ramping shipments of Mozaic-based HAMR drives, with products reaching up to 3 terabytes per disk and progressing toward higher capacities. It continues to align with long-term plans extending to 10 terabytes per disk. Hard drives remain central to data center architectures, supporting large-scale data storage needs, including AI workloads, cloud environments and data tiering systems. In January 2026, Seagate rolled out new edge-to-cloud storage solutions, comprising 32TB HDD across the Exos, SkyHawk AI and IronWolf Pro portfolios.
However, Seagate faces tough competition from Western Digital Corporation (WDC - Free Report) and NetApp, Inc. (NTAP - Free Report) . Volatile macroeconomic conditions and high indebtedness remain concerns.
Taking a Look at WDC & NTAP’s Growth Strategies
Western Digital is focusing on advancing mass-capacity storage through high-density HDD innovations, leveraging ePMR, UltraSMR and HAMR technologies to deliver scalable, cost-efficient and reliable storage. The company is driving areal density gains and accelerating adoption of higher-capacity drives, with shipments reaching 215 exabytes and strong uptake of the latest-generation ePMR drives. It is collaborating with hyperscale customers, expanding UltraSMR platforms and advancing its roadmap toward higher-capacity solutions. Western Digital is also enhancing performance through new technologies, improving power efficiency and strengthening long-term customer commitments supported by multi-year agreements and continued infrastructure innovation.
NetApp is witnessing higher demand from customers for its portfolio of modern all-flash arrays, especially the C-series capacity flash and ASA block-optimized flash. The new all-flash A-series is also picking up momentum. These enterprise storage products will allow users to boost workloads, including traditional enterprise applications and Gen AI. The company expects the new AFF A-series, along with its C-series and ASA products, to capture further share in the all-flash market. Strong customer engagement with NetApp’s unified and block-optimized all-flash storage portfolio drove another record quarter for all-flash array revenue, which grew 11% year over year to $1 billion in the third-quarter fiscal 2026, representing an annualized run rate of $4.2 billion. The growing adoption of AI workloads is also boosting demand for high-performance flash storage.
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Seagate Divests Lyve Cloud to Enhance Core Storage Focus
Key Takeaways
Seagate Technology Holdings plc (STX - Free Report) has taken a strategic step to sharpen its focus on core mass-capacity storage by divesting its Lyve Cloud business to Wasabi Technologies. The deal also makes Seagate a shareholder in the fast-growing cloud storage provider. While financial details remain undisclosed, the transaction reflects Seagate’s intent to streamline operations and align resources toward rising global demand for large-scale data storage infrastructure.
Lyve Cloud, known for its strong enterprise security and compliance, is expected to deliver greater customer value through its integration with Wasabi, offering simpler pricing and broader global infrastructure. The move ensures that Lyve Cloud customers continue to receive high-quality service through a specialized and independent cloud storage platform. By selling the business to Wasabi, Seagate enables customers to benefit from a provider focused entirely on cloud storage innovation, while it concentrates on advancing its leadership in mass-capacity storage solutions.
The decision comes amid accelerating enterprise demand driven by artificial intelligence (AI), analytics, video applications and long-term data retention needs. As organizations handle data at petabyte scale, they are increasingly prioritizing cost predictability, operational simplicity and secure, high-performance storage environments. Seagate’s divestiture of Lyve Cloud aligns with evolving customer needs by integrating it into Wasabi’s purpose-built ecosystem. The combined platform also improves compatibility with key partners like Veeam, Rubrik and Commvault, helping reduce complexity in multi-vendor storage environments.
Seagate is focusing on advancing mass-capacity storage through its HAMR technology roadmap, which enables higher areal density and supports growing data requirements. The company is ramping shipments of Mozaic-based HAMR drives, with products reaching up to 3 terabytes per disk and progressing toward higher capacities. It continues to align with long-term plans extending to 10 terabytes per disk. Hard drives remain central to data center architectures, supporting large-scale data storage needs, including AI workloads, cloud environments and data tiering systems. In January 2026, Seagate rolled out new edge-to-cloud storage solutions, comprising 32TB HDD across the Exos, SkyHawk AI and IronWolf Pro portfolios.
However, Seagate faces tough competition from Western Digital Corporation (WDC - Free Report) and NetApp, Inc. (NTAP - Free Report) . Volatile macroeconomic conditions and high indebtedness remain concerns.
Taking a Look at WDC & NTAP’s Growth Strategies
Western Digital is focusing on advancing mass-capacity storage through high-density HDD innovations, leveraging ePMR, UltraSMR and HAMR technologies to deliver scalable, cost-efficient and reliable storage. The company is driving areal density gains and accelerating adoption of higher-capacity drives, with shipments reaching 215 exabytes and strong uptake of the latest-generation ePMR drives. It is collaborating with hyperscale customers, expanding UltraSMR platforms and advancing its roadmap toward higher-capacity solutions. Western Digital is also enhancing performance through new technologies, improving power efficiency and strengthening long-term customer commitments supported by multi-year agreements and continued infrastructure innovation.
NetApp is witnessing higher demand from customers for its portfolio of modern all-flash arrays, especially the C-series capacity flash and ASA block-optimized flash. The new all-flash A-series is also picking up momentum. These enterprise storage products will allow users to boost workloads, including traditional enterprise applications and Gen AI. The company expects the new AFF A-series, along with its C-series and ASA products, to capture further share in the all-flash market. Strong customer engagement with NetApp’s unified and block-optimized all-flash storage portfolio drove another record quarter for all-flash array revenue, which grew 11% year over year to $1 billion in the third-quarter fiscal 2026, representing an annualized run rate of $4.2 billion. The growing adoption of AI workloads is also boosting demand for high-performance flash storage.
STX Price Performance, Valuation and Estimates
In the past three months, STX’s shares have gained 56.1% compared with the Computer Integrated Systems industry’s growth of 8.3%.
Image Source: Zacks Investment Research
In terms of forward price/earnings, STX’s shares are trading at 29.77X, higher than the industry’s 10.45X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STX’s earnings for fiscal 2026 has been revised up 0.3% to $12.93 over the past 60 days.
Image Source: Zacks Investment Research
Currently, Seagate has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.