As Wall Street braces for Seagate Technology’s upcoming earnings announcement, market analysts are projecting exceptional performance from the data storage giant. The company is expected to report fiscal fourth-quarter results that showcase remarkable year-over-year growth, potentially signaling a decisive turnaround after navigating challenging market conditions.
According to consensus estimates from financial data provider FactSet, Seagate is forecast to report earnings per share of $1.62 for the quarter ending June 2025, representing a staggering 300% increase compared to the same period last year. Revenue projections hover around $2.32 billion, indicating a 30% year-over-year growth – a notable achievement in the competitive storage industry landscape.
“The projected triple-digit earnings growth reflects Seagate’s strategic positioning within the AI and cloud infrastructure buildout,” explains Morgan Stanley analyst Joseph Moore in a recent client note. “The company has effectively aligned its high-capacity enterprise drives with expanding data center demand, particularly as AI workloads require substantially more storage capacity.”
This anticipated performance comes amid a broader recovery in the enterprise storage market, which has experienced a resurgence driven by artificial intelligence applications and renewed corporate IT spending. Seagate, as one of the world’s largest manufacturers of hard disk drives (HDDs), stands to benefit significantly from these tailwinds.
The company’s potential outperformance stems from several key factors. First, the explosion of data-intensive AI applications has created unprecedented demand for high-capacity storage solutions. Seagate’s leadership in mass-capacity drives positions it ideally to capitalize on this trend. Second, the company has successfully executed a strategic shift toward higher-margin enterprise products, moving away from the more commoditized consumer market.
I’ve observed firsthand how Seagate has navigated significant industry transitions throughout my years covering the storage sector. At a recent industry conference in Manhattan, Seagate CEO Dave Mosley emphasized the company’s commitment to innovation in high-density storage technologies. “We’re seeing the data growth curve accelerate dramatically,” Mosley noted during his keynote address. “AI training and inference are creating massive new storage requirements that traditional infrastructure wasn’t built to handle.”
The Federal Reserve’s recent interest rate policies have also played a role in improving Seagate’s financial outlook. As borrowing costs stabilize and potentially decline, corporate capital expenditure budgets – particularly for technology infrastructure – have begun expanding again. According to data from the Bureau of Economic Analysis, business investment in information processing equipment increased 8.3% in the most recent quarter, the fastest growth rate in nearly three years.
Financial analysts from Goldman Sachs recently upgraded Seagate’s stock rating to “Buy” from “Neutral,” citing improving industry dynamics and the company’s strong execution. “Our channel checks indicate Seagate is gaining share in the 20+ terabyte drive segment, which carries substantially higher margins than legacy products,” wrote analyst Rod Hall in his investment note.
Looking at market dynamics, the storage industry appears to be entering what Bank of America calls a “super cycle” for enterprise storage. After several years of cautious IT spending, companies are now accelerating data center investments to support AI initiatives and modernization efforts. This broader trend benefits established players like Seagate that have the manufacturing scale and technological expertise to meet growing demand.
However, investors should note potential challenges ahead. The storage industry remains highly competitive, with Western Digital and various solid-state drive manufacturers vying for market share. Additionally, macroeconomic uncertainties, including ongoing supply chain constraints and geopolitical tensions affecting technology trade, could impact future growth trajectories.
“While we’re optimistic about Seagate’s near-term performance, the longer-term picture depends on their ability to continue innovating in mass-capacity technologies,” explains technology analyst Krish Sankar from Cowen. “The transition to new recording methods like HAMR (Heat-Assisted Magnetic Recording) will be crucial for maintaining their competitive edge.”
For the upcoming earnings call, Wall Street will be watching several key metrics beyond the headline numbers. Gross margin trends, which reflect Seagate’s pricing power and manufacturing efficiency, will be particularly important. Analysts expect margins to expand to approximately 32%, up from 25% in the year-ago quarter, driven by improved product mix and operating leverage.
Another focal point will be the company’s capital return policy. Seagate has historically maintained a robust dividend, currently yielding around 3.2%, making it attractive to income-oriented investors in the technology sector. Any updates to dividend plans or share repurchase authorizations could significantly impact investor sentiment.
From my perspective after covering the storage industry across multiple business cycles, Seagate appears well-positioned for this particular market environment. The convergence of AI-driven demand, improved enterprise spending, and the company’s strategic focus on high-capacity drives creates a favorable backdrop for continued performance improvement.
As we approach the earnings announcement, investors would be wise to look beyond the immediate results and focus on management’s commentary regarding long-term technology roadmaps and capacity expansion plans. These forward-looking indicators will provide crucial insights into Seagate’s ability to sustain this growth trajectory beyond the current cycle.
