Seagate Forecast Boosts Storage Stocks Amid AI Spending Confidence
- tech360.tv
- 2 hours ago
- 2 min read
Storage company shares increased in extended trading, following strong revenue and profit forecasts from Seagate Technology. The forecasts indicated sustained enterprise spending on artificial intelligence equipment.
Seagate's outlook and the surge in storage stocks highlighted investor confidence that enterprise AI expenditure will maintain demand for data-storage equipment. This occurred despite broader market concerns regarding the rate of AI adoption.
Organisations have funneled increasing amounts of money into data drives, hard disks, and other digital storage as they rushed to upgrade their artificial intelligence models and infrastructure.
Seagate shares soared 16% in extended trading, Western Digital increased 10%, Micron Technology climbed 3%, and SanDisk rose 4%. These gains added a combined USD 60 billion to the four storage technology companies' market value.
Seagate Chief Executive Officer Dave Mosley stated on a post-earnings conference call, "AI is amplifying demand across existing applications such as video, where large cloud providers are integrating AI in the platforms to boost user engagement and revenue opportunities, driving new video creation and the need to store it."
Seagate forecast fourth-quarter revenue of USD 3.45 billion, plus or minus USD 100 million. This projection surpassed estimates of USD 3.16 billion, according to data compiled by LSEG.
Executives at Seagate and rival Western Digital previously indicated their capacity had been fully allocated and sold out through calendar 2026.
In Tuesday's trading session, the Nasdaq fell almost 1%, hurt by concerns about the AI boom after a report said OpenAI has fallen short of its goals for new users and revenue in recent months.
Nasdaq futures rose 0.2% following Seagate's report, showing that traders expect tech stocks to partly rebound in Wednesday's session.
The increase in storage demand also coincides with a surge in memory prices. Power-hungry data centres utilise a significant portion of high-bandwidth memory to store and process vast amounts of information.
The shortage of memory chips has left companies scrambling to find hardware that can aid their AI efforts and store data, benefiting companies such as Seagate that make physical hard drives.
Ahead of Tuesday's report, Seagate shares had already more than doubled, year to date.
Seagate Technology's strong revenue and profit forecasts spurred an increase in storage company shares.
This outlook underscored investor confidence in sustained enterprise artificial intelligence spending for data storage.
Seagate, Western Digital, Micron Technology, and SanDisk saw significant stock gains, adding USD 60 billion to their market value.
Source: REUTERS
