Why Seagate Stock Skyrocketed This Week
Key Points
Seagate published its fiscal Q3 results this week and posted very strong numbers.
The company's sales and earnings results beat Wall Street's expectations.
Seagate's forward guidance was also much better than expected.
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Seagate Technology (NASDAQ: STX) stock booked strong valuation gains following the company's latest earnings release. The company's share price rose 24% over the last week of trading.
After the market closed on April 28, Seagate published results for the second quarter of its 2026 fiscal year -- which ended April 3. Sales and earnings for the period far exceeded Wall Street's expectations, and management issued positive forward guidance.
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Seagate's fiscal Q3 results crushed Wall Street's elevated expectations
Seagate recorded a non-GAAP (adjusted) profit of $4.10 per share on revenue of $3.11 billion in the quarter. Sales in the period were up 44% year over year, and adjusted earnings improved dramatically from the profit of $1.90 per share posted in the prior-year period. The company's sales beat the average Wall Street analyst estimate by $150 million, and adjusted earnings per share topped the consensus forecast by $0.60.
What's next for Seagate?
Soaring demand in the memory and storage market connected to artificial intelligence has had a transformative impact on Seagate's business, and it looks like strong performance is poised to continue. For the current quarter, the company's midpoint guidance calls for revenue of roughly $3.45 billion -- representing another period of robust sequential growth. Meanwhile, adjusted earnings per share are projected to come in at roughly $5. The company's guidance far exceeded the average analyst estimate's call for adjusted earnings of $2.96 on revenue of $3.16 billion, suggesting that analysts continued to significantly underestimate the business's momentum even as tailwinds intensified.
Should you buy stock in Seagate Technology Plc right now?
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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