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Seagate Technology Gains From AI Boom: Is Long-Term Growth Secured? – August 11, 2026

Web Desk August 11, 2026

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Seagate Technology Gains From AI Boom: Is Long-Term Growth Secured? – August 11, 2026

Key Takeaways

Seagate benefits from AI storage demand, with data centers driving 81% of total revenues.
Seagate has nearline capacity allocated into 2028, as customers plan through 2029 and beyond.
Rivals such as Western Digital and NetApp are also benefiting from growing AI-driven storage demand.

Seagate Technology Holdings plc (STX – Free Report) is emerging as a direct beneficiary of artificial intelligence (“AI”) workload proliferation, with rising data storage needs creating a durable demand tailwind.

A key factor is Seagate’s data center business, which accounted for 89% of total exabyte shipments in the June quarter. A total of 218 exabytes was shipped in the fourth quarter of fiscal 2026 (up 34% year over year), with 195 exabytes shipped into the data center market. The data center segment revenues of $2.9 billion surged 17% sequentially and 57% year over year and accounted for 81% of total revenues. Management noted that AI-enhanced applications are amplifying storage requirements, reinforcing a robust demand backdrop.

Seagate noted that a significant portion of nearline capacity is already allocated into calendar 2028 under long-term supply agreements, with customers looking to extend planning horizons through 2029 and beyond.

Seagate’s innovation strategy is closely aligned with this demand shift, particularly its HAMR-based Mozaic platform. This technology enables higher areal density, allowing more data to be stored per disk while improving capital efficiency. HAMR-based products represented approximately 40% of Seagate’s nearline exabyte shipment run rate at the end of fiscal 2026. Management expects that investments in HAMR capabilities will aid in achieving a mid-20% exabyte growth target.

Seagate is also executing its value-based pricing strategy, leveraging solid demand to drive sustainable profitability.

With AI adoption accelerating rapidly and cloud demand remaining buoyant, Seagate appears well-positioned to benefit from long-term structural tailwinds. Fiscal first-quarter revenues are expected to be $4.1 billion (+/- $100 million), a 56% year-over-year improvement at the midpoint.

However, execution risks remain as it transitions manufacturing from conventional products to newer generations of high-capacity HAMR drives. Further, the opportunity is unfolding in an extremely competitive environment where players such as Western Digital (WDC – Free Report) and NetApp (NTAP – Free Report) are vying for a larger share of the data storage market.

Mapping the Competitive Terrain

Western Digital is one of Seagate’s closest competitors. Like Seagate, WDC is also witnessing rapid top-line growth amid the AI boom. Fiscal fourth-quarter revenues surged 44% to $3.75 billion. Apart from agentic AI and increasing inference workloads, higher uptake of video analytics, IoT, autonomous systems and cybersecurity data retention are likely to drive storage demand. This bodes well for all the players in this space as it offers strong long-term visibility.

Buoyed by strong demand trends, WDC expects fiscal first-quarter non-GAAP revenues of $4.1 billion (+/- $100 million), up 45% year over year at the midpoint.

NetApp continues to benefit from demand for modern all-flash arrays that support enterprise modernization and AI workloads. In fiscal 2026, all-flash revenues reached $4.2 billion, up 11% year over year, and fourth-quarter all-flash revenues were $1.2 billion, up 18%. Management highlighted that AI deployments drove broad strength along with rapid cloud adoption.

The company expects fiscal 2027 revenues to be between $7.325 billion and $7.575 billion, representing 8% year-over-year growth at the midpoint. The guidance indicates a robust enterprise IT demand environment with higher enterprise AI activity compared with the previous fiscal year. Fiscal first-quarter revenues are expected to be in the range of $1.75 billion to $1.9 billion.