Seagate Stock Tests $926 as HAMR Scale-Up and Cloud Demand Strengthen STX

TradingKey - Seagate closes in on $904.38 with a 6.49% gain on September 8. This brings Seagate to $904.38, where the stock was sitting just below the $926.18 breakout level, but below the $925.44 session high. Supporting the move are greater cloud exabyte growth numbers, more HAMR adoption, higher free cash flow, and a better balance sheet. The primary concern is whether operating momentum will push the stock to break the trend line.

Q4 Revenue and Margins Expanded Sharply

For fiscal Q4 revenue was $3.629 billion, a 48% positive change from the same period last year. For GAAP gross margin, this number was 52.3%, making a large positive change from 37.4% last year. Non-GAAP gross margin was 52.7%. GAAP net income was $1.294 billion and non-GAAP EPS was $5.71.

For fiscal 2026 revenue was $12.195 billion, a 34% positive change from last year with non-GAAP operating margin sitting at 36.5%. More impressive is the combination of high demand and better economics, versus only revenue growth, that Seagate has been able to achieve. Seagate is more efficiently valuing higher capacity better than before.

Q1 Guidance Keeps the Growth Cycle Intact

Management still maintains guidance of $4.1 billion plus or minus $100 million revenue for Q1 FY2027 with non-GAAP EPS of $7.30 plus or minus $0.20. At this guidance, revenue would increase around 13% sequentially for a strong Q4.

Between September 9 and now, there hasn’t been any official documentation of where the spending cuts are. There has been no official guidance reduction through September 9. This is important because this lack of documentation may indicate that while interest rates are rising and the macro environment is difficult, hyperscale customer demand does not appear to be slowing significantly.

HAMR Is Becoming Seagate’s Main Strategic Advantage

The primary technology is Seagate’s Mozaic 4+ platform, built upon heat assisted magnetic recording or HAMR. Mozaic 4 has been qualified and is in production for two of the leading hyperscale cloud providers supporting 44TB capacity.

This is significant because AI data centers require more than just flash storage for persistence. Large model checkpoint logs, training data archives, colder data retrieval systems, and large logs require huge persistent low-cost storage. HAMR enables Seagate to store more data per rack while lowering infrastructure costs and power consumption per stored terabyte.

The roadmap also indicates that Seagate is moving from a capacity of more than 4TB per disk toward a target of 10TB per disk, potentially enabling 100TB-class hard drives, per the direction of our recent discussions. Should the direction of those discussions be maintained, Seagate will be able to ship an increased capacity of stored data without requiring customers to increase the physical size of their data centers at the same pace.

Record Free Cash Flow Improves the Quality of the Story

For the fourth quarter (Q4), Seagate achieved $1.3 billion in operating cash flow and $1.1 billion in free cash flow. Full year free cash flow hit a record high of $3.1 billion. Consolidated Debt decreased by $302 million in the fourth quarter and by $1.4 billion for the full fiscal year (ending June). Total consolidated debt now stands at $3.6 billion with $1.7 billion in cash. Seagate return to shareholders for FY2026 was $810 million which included dividends and share purchases.

The current growth cycle is looking healthier than just a volume rebound of hardware, due to margin improvement, deleveraging, and cash returns.

Citi Today, Goldman Sachs Tomorrow

Seagate’s management is scheduled to speak at Citi's Global TMT Conference scheduled for today at 10:50 AM ET and at Goldman Sachs’ Communacopia + Technology Conference on September 10 at 1:10 PM ET.

The following items will be of interest for the upcoming presentations: HAMR adoption, Mozaic 4+ qualifications, hyperscalers’ exabyte growth, pricing, and Q1 guidance and gross margin sustainability. Margin sustainability will be key to price guidance for Q1. Also, desire for cloud storage will help support the current breakout. Slower qualifications would be a more negative impact than AI price comments that are not of interest.

Seagate Technical Analysis: $926.18 Is the Breakout Trigger

STX closed the September 8 session around $904.38 after a near 6.49% rally that was almost textbook with the chart’s $904.22 reference level. Price has, however, risen back above the $830.13 moving average, and the level of $842.52 and $875.78, where price now rests slightly below the descending trendline that capped the rallies after the peak in August.

Seagate Stock Price Chart - Source: Tradingview

The nearest resistance lies at $926.18. The confirmation of a material bullish breakout is brought about with a break above the trendline and $926. This should be followed by a move to the next target of $962.32. Above this, the previous swing area of $1,012.72 represents the next target.

RSI at 67 is slightly above its signal line of 66 and has bullish momentum. That said, a short consolidation or a test of the trendline is to be expected as the setup is not as early as before. That said, the first major support lies at $875.78. Below that, the moving average at $842.52 in combination with $830.13 represents the next major support.

Key Levels

·       Latest completed close: $904.38

·       Breakout resistance: $926.18

·       First upside target: $962.32

·       Major upside target: $1,012.72

·       First support: $875.78

·       Moving average support: $842.52

·       Major support: $830.13

·       RSI: Approx. 67, bullish, but steadied

Why is Seagate stock in focus?

Strong cloud exabyte demand, scaling HAMR adoption, expanding gross margins, and achieving record free cash flow are positively impacting Seagate. The Mozaic 4+ ramp also provides Seagate a unique approach to monetizing data.

What level confirms further STX upside?

A move above $926.18 clears the descending trendline and establishes $962.32 as the next target. Above that, the previous swing area of $1,012.72 remains as the next significant target.

Bottom Line

Seagate is looking better than just an AI-storage momentum trade because the operating environment is improving on a few fronts: HAMR is maturing, demand for cloud services remains high, margins remain strong and free cash flow is at record highs. The main risks are the hyperscalers' capex, the execution of HAMR, competition from Western Digital and flash storage, and higher rates. For now, I think the stock will likely be rising while it's trading above $875.78, but $926.18 must be broken to confirm the next potential rise to $962 and even $1,013.