Seagate is repositioning from cyclical HDD vendor to the AI era’s mass-capacity storage backbone—powered by HAMR/Mozaic and hyperscaler build-to-order demand visibility.
Overview
Seagate (STX), founded in 1978, is positioned as a critical supplier to the global digital economy by providing high-capacity, low-TCO persistent storage—primarily via HDDs (over 90% of revenue). The business is increasingly concentrated in Mass Capacity nearline drives for hyperscale/cloud data centers: Mass Capacity rose to 81% of FY2025 revenue (vs 72% in FY2024) and data center represented 79% of revenue in FQ2 FY2026, highlighting dependence on AI-driven infrastructure buildouts. Seagate’s operating model emphasizes build-to-order manufacturing aligned to firm hyperscaler commitments, improving visibility reportedly into 2027. Financially, the company is in a period of record profitability, powered by HAMR technology (Mozaic) enabling 30TB+ drives and improved manufacturing economics: FY2025 revenue was $9.10B with non-GAAP gross margin 35.8% and EPS $8.10; FQ2 FY2026 revenue was $2.83B with record 42.2% gross margin and EPS $3.11. Liquidity is described as robust (~$2.7B), with shareholder returns supported by a quarterly dividend and a $5B repurchase authorization.