STX Stock Forecast & Price Target

Seagate Technology Holdings has demonstrated robust growth in its Data Center segment, with revenue reaching $2.1 billion, reflecting a significant increase of 34% year-over-year, which now comprises 80% of total revenue. The company reported a strong first quarter for FY26, achieving $2.63 billion in revenue, surpassing prior estimates while maintaining a record non-GAAP gross margin of 40.1%. With the successful adoption of the HAMR Mozaic platform and strong demand from cloud service providers, Seagate is well-positioned to sustain this growth trajectory, supporting a positive outlook for its future financial performance.

The excerpt outlines a concerning trend in Seagate Technology Holdings’ performance, particularly in its Edge/IoT segment, which witnessed a significant decline of 11% quarter-over-quarter and 12% year-over-year, attributable to decreased consumer and client demand. While the company reported a stable gross debt of $5 billion and a slight improvement in net leverage from 1.8x to 1.5x, these metrics do not fully offset the underlying weaknesses in revenue generation from critical segments. Despite a positive non-GAAP EPS performance, the fundamental challenges in demand and revenue in key areas raise significant concerns about the company's future growth prospects.