Seagate Technology's stock has surged sevenfold over the past year as demand for the company's storage gear keeps outrunning supply. The data storage provider, known for high-capacity hard disk drives and solid-state drives used in data centers, has become one of the clearest beneficiaries of the AI infrastructure boom.
The rally is being driven by a business mix that is tilted hard toward data centers. In Seagate's second quarter of fiscal 2026, those customers accounted for 87% of shipments, and non-GAAP earnings jumped 53% from a year earlier to $3.11 per share. The company has already sold out its high-capacity hard disk drives for 2026, while major cloud customers are lining up to buy capacity in 2027 and 2028.
That scarcity has had a direct effect on pricing. High-capacity storage drive prices rose 60% between November 2025 and February 2026, and SSD prices climbed even faster. For a hardware supplier that makes money when every rack in a data center needs more storage, a shortage is not a side note — it is the story. Gartner expects spending on data center systems to jump 56% in 2026, a backdrop that is helping keep pressure on supply across the market.
Seagate's latest guidance suggests the momentum has not faded. The company guided for $3.40 per share at the midpoint for its recently concluded fiscal Q3 2026, a 79% increase from the year-ago period's $1.90 per share. For fiscal 2026 as a whole, analysts expect earnings to reach $13.17 per share, above the consensus growth estimate of 63%, and they see fiscal 2027 earnings rising another 58%.
The tension for investors is that the same shortage driving Seagate's results also raises the question of how long it can last. The company has capacity sold out for 2026 and cloud customers already reserving supply for the next two years, but that kind of demand can be powerful only until production catches up or pricing cools. If earnings rise 70% in each of the remaining three quarters of calendar 2026, they would total $17.53 per share for the year, a level that would leave Seagate looking less like a cyclical supplier and more like a core pick-and-shovel play on AI buildout.
