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Can Seagate Sustain Its Strong Revenue Growth in Fiscal 2027?
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Key Takeaways
Seagate ended fiscal 2026 with 34% revenue growth, driven by cloud demand and AI-enhanced applications.
About 90% of exabyte shipments went to data centers, with most nearline exabytes allocated into 2028.
HAMR reached about 40% of nearline exabyte run rate, while Mozaic 4 ramps with major cloud providers.
Seagate Technology Holdings plc (STX - Free Report) ended fiscal 2026 with strong revenue growth, supported by sustained demand for mass-capacity storage. Fiscal 2026 revenues increased 34%, primarily driven by cloud customers’ demand for data-storage solutions and the growing adoption of AI-enhanced applications. In the June quarter, revenues reached $3.6 billion, rising 17% sequentially and 48% year over year. Management expects fiscal 2027 revenue growth to exceed the fiscal 2026 figure, supported by stronger demand visibility and customer commitments.
Data-center demand remains a major contributor to Seagate’s performance. Data centers accounted for about 90% of exabyte shipments, while the majority of nearline exabytes are already allocated into calendar 2028 under existing long-term supply agreements. Customers are also discussing planning horizons extending through 2029 and beyond. Cloud customers remain the largest source of nearline demand, with three years of sequential quarterly exabyte growth. Seagate said it has not seen evidence of a slowdown as AI adoption adds to demand from traditional data-intensive applications such as video.
The company is also expanding its HAMR-based Mozaic platform to support higher storage density and exabyte growth. HAMR products represented about 40% of nearline exabyte shipment run rate at the end of fiscal 2026. Seagate is targeting nearline exabyte growth in the mid-20% range over the next few years while maintaining relatively stable hard-drive unit output. Mozaic 4, which supports drives of up to 44 terabytes, is ramping with major cloud service providers, while Mozaic 5 remains on track for qualification shipments in late calendar 2027.
For the September quarter, Seagate expects revenues of $4.1 billion, plus or minus $100 million, representing 56% year-over-year growth at the midpoint. Management expects sequential revenue growth and margin expansion throughout fiscal 2027. Pricing is also expected to contribute to sequential improvement, supported by strong demand and the current supply-demand gap.
Taking a Look at STX’s Competitors
Western Digital Corporation’s (WDC - Free Report) revenue outlook remains strong, supported by robust cloud and AI-driven storage demand. Fiscal 2026 revenues rose 36% year over year to $12.9 billion, and fourth-quarter revenues surged 44% to $3.75 billion. Cloud remained the primary growth engine, generating $3.3 billion, or 89% of quarterly revenues, up 43% year over year. Client revenues increased 61% to $225 million, and Consumer revenues climbed 38% to $187 million. For first-quarter fiscal 2027, management expects revenues of about $4.1 billion at the midpoint, implying 45% year-over-year growth, reflecting favorable pricing, higher-capacity product adoption and sustained storage demand across its major end markets.
Micron Technology (MU - Free Report) is benefiting from AI-driven demand for memory and storage, tighter DRAM and NAND supply and a richer mix of HBM, data center SSD and high-capacity products. Record third-quarter fiscal 2026 results, a stronger fourth-quarter outlook and durable strategic customer agreements support higher revenue visibility, cash flow and margins. Its cash generation and net cash balance provide flexibility to fund capacity additions while enhancing shareholder value. The company is also widening its data center, automotive, robotics and edge AI opportunities as memory becomes more strategic to system performance. For the fourth quarter of fiscal 2026, Micron expects revenues of $50 billion, plus or minus $1 billion.
Going by the price/earnings ratio, the company’s shares currently trade at 22.11 forward earnings compared with 12.4 for the industry.
Image Source: Zacks Investment Research
STX is currently witnessing an uptrend in estimate revisions. Earnings estimates for fiscal 2027 have been revised up 28.7% to $36.09 over the past 60 days, while estimates for fiscal 2028 have risen 17.8% to $58.28.
View the Zacks #1 Rank List
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Can Seagate Sustain Its Strong Revenue Growth in Fiscal 2027?
Key Takeaways
Seagate Technology Holdings plc (STX - Free Report) ended fiscal 2026 with strong revenue growth, supported by sustained demand for mass-capacity storage. Fiscal 2026 revenues increased 34%, primarily driven by cloud customers’ demand for data-storage solutions and the growing adoption of AI-enhanced applications. In the June quarter, revenues reached $3.6 billion, rising 17% sequentially and 48% year over year. Management expects fiscal 2027 revenue growth to exceed the fiscal 2026 figure, supported by stronger demand visibility and customer commitments.
Data-center demand remains a major contributor to Seagate’s performance. Data centers accounted for about 90% of exabyte shipments, while the majority of nearline exabytes are already allocated into calendar 2028 under existing long-term supply agreements. Customers are also discussing planning horizons extending through 2029 and beyond. Cloud customers remain the largest source of nearline demand, with three years of sequential quarterly exabyte growth. Seagate said it has not seen evidence of a slowdown as AI adoption adds to demand from traditional data-intensive applications such as video.
The company is also expanding its HAMR-based Mozaic platform to support higher storage density and exabyte growth. HAMR products represented about 40% of nearline exabyte shipment run rate at the end of fiscal 2026. Seagate is targeting nearline exabyte growth in the mid-20% range over the next few years while maintaining relatively stable hard-drive unit output. Mozaic 4, which supports drives of up to 44 terabytes, is ramping with major cloud service providers, while Mozaic 5 remains on track for qualification shipments in late calendar 2027.
For the September quarter, Seagate expects revenues of $4.1 billion, plus or minus $100 million, representing 56% year-over-year growth at the midpoint. Management expects sequential revenue growth and margin expansion throughout fiscal 2027. Pricing is also expected to contribute to sequential improvement, supported by strong demand and the current supply-demand gap.
Taking a Look at STX’s Competitors
Western Digital Corporation’s (WDC - Free Report) revenue outlook remains strong, supported by robust cloud and AI-driven storage demand. Fiscal 2026 revenues rose 36% year over year to $12.9 billion, and fourth-quarter revenues surged 44% to $3.75 billion. Cloud remained the primary growth engine, generating $3.3 billion, or 89% of quarterly revenues, up 43% year over year. Client revenues increased 61% to $225 million, and Consumer revenues climbed 38% to $187 million. For first-quarter fiscal 2027, management expects revenues of about $4.1 billion at the midpoint, implying 45% year-over-year growth, reflecting favorable pricing, higher-capacity product adoption and sustained storage demand across its major end markets.
Micron Technology (MU - Free Report) is benefiting from AI-driven demand for memory and storage, tighter DRAM and NAND supply and a richer mix of HBM, data center SSD and high-capacity products. Record third-quarter fiscal 2026 results, a stronger fourth-quarter outlook and durable strategic customer agreements support higher revenue visibility, cash flow and margins. Its cash generation and net cash balance provide flexibility to fund capacity additions while enhancing shareholder value. The company is also widening its data center, automotive, robotics and edge AI opportunities as memory becomes more strategic to system performance. For the fourth quarter of fiscal 2026, Micron expects revenues of $50 billion, plus or minus $1 billion.
STX Price Performance, Valuation and Estimates
In the past year, STX shares have skyrocketed 343.9%, outperforming the Computer Integrated Systems industry’s growth of 207.3%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, the company’s shares currently trade at 22.11 forward earnings compared with 12.4 for the industry.
Image Source: Zacks Investment Research
STX is currently witnessing an uptrend in estimate revisions. Earnings estimates for fiscal 2027 have been revised up 28.7% to $36.09 over the past 60 days, while estimates for fiscal 2028 have risen 17.8% to $58.28.
Image Source: Zacks Investment Research
STX currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.