Seagate (STX) Shares Soar 18% on Stellar Quarterly Results and Optimistic Forecast

Key Highlights

• Seagate’s Q3 adjusted earnings per share reached $4.10, surpassing the $3.48 analyst consensus, while revenue totaled $3.11B versus $2.95B projected
• Year-over-year revenue surged 44% compared to $2.16B in the prior-year quarter
• Fourth-quarter outlook calls for $5.00 EPS and $3.45B in revenue, both exceeding analyst projections
• Non-GAAP gross margin climbed to 47.0% from 36.2% in the year-ago period
• STX shares jumped more than 18% during extended trading, hitting $687.00

Seagate Technology (STX) delivered an impressive fiscal third quarter for 2026, exceeding analyst projections on both the top and bottom lines, while unveiling fourth-quarter guidance that significantly outpaced Wall Street expectations.

The data storage giant reported adjusted earnings per share of $4.10, comfortably ahead of the $3.48 consensus forecast. Quarterly revenue reached $3.11 billion, surpassing expectations of $2.95 billion and marking a 44% increase from the $2.16 billion recorded in the comparable quarter last year.

Shares ended Tuesday’s regular trading session at $579.03 before climbing to $687.00 during after-hours activity — representing a gain exceeding 18%.

Seagate Technology Holdings plc, STX

Net earnings climbed to $748 million, a substantial increase from the $340 million posted in the year-earlier period. GAAP gross margin reached 46.5%, while the non-GAAP measure hit 47.0%, marking a significant improvement from the 36.2% recorded during the prior-year quarter.

Seagate produced $1.1 billion in operating cash flow and $953 million in free cash flow throughout the quarter. These robust figures came even as the company paid down $641 million in outstanding debt during the same timeframe.

Shareholders received $191 million through a combination of dividend payments and share repurchases. The company’s board approved a quarterly cash dividend of $0.74 per share, scheduled for payment on July 7, 2026, to shareholders of record as of June 24, 2026.

Forward Outlook Significantly Tops Expectations

The primary catalyst for the after-hours rally was the company’s forward-looking guidance. Seagate projected fourth-quarter revenue of $3.45 billion, give or take $100 million, compared to the analyst consensus of $3.15 billion — representing a 9% upside at the midpoint.

Fourth-quarter adjusted earnings per share guidance landed at $5.00, plus or minus $0.20, well above the $3.97 analyst forecast. This represents a 26% premium over Street expectations.

Executives noted that the guidance assumes limited impact from tariff policies and present geopolitical uncertainties.

Artificial Intelligence Fueling Storage Expansion

Seagate emphasized artificial intelligence as a critical growth catalyst. The company highlighted that expanding AI workloads are driving accelerated data generation, which consequently boosts long-term storage capacity requirements.

This strategic positioning resonated strongly with investors and helped explain the robust revenue expansion.

Over the trailing twelve-month period, STX has climbed approximately 610%, positioning it among the top performers within the technology hardware sector.

The stock’s 52-week trading range extended from $77.56 to $592.84. Before Tuesday’s after-hours surge, shares were already trading near the upper end of that range.

Seagate’s price momentum remains positive across short-, medium-, and long-term horizons, based on Benzinga’s stock evaluation metrics.

The company’s third-quarter free cash flow of $953 million combined with debt reduction of $641 million demonstrates ongoing balance sheet improvement.

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