STX Stock Forecast & Price Target

Seagate Technology Holdings has demonstrated robust financial performance, with Data Center revenue experiencing a significant 34% year-over-year growth to $2.1 billion, now constituting 80% of total revenue, driven by heightened demand from hyperscale cloud providers. The company's strong performance is reflected in an increase in non-GAAP gross margins to a record 40.1%, leveraging the momentum of the HAMR product roadmap and growing cloud-related demand. With over one million HAMR drives shipped and acceleration in customer qualifications, Seagate is well-positioned to capitalize on favorable market trends and extend its growth trajectory into FY27.

Seagate Technology Holdings has reported a notable decline in its Edge/IoT segment, with revenues dropping to $515 million, reflecting an 11% decrease quarter-over-quarter and a 12% decrease year-over-year, indicative of weakened consumer and client demand. Despite a stable gross debt level of $5 billion and a slight reduction in net leverage to 1.5x, the reliance on the build-to-order strategy may not sufficiently counterbalance the significant downturn in consumer demand for key product segments. While non-GAAP EPS exceeded expectations, the overall adverse trends in revenue growth and declining market segments raise concerns about the company's long-term financial sustainability.