Seagate’s Revenue Outlook Fuels Rally in AI Stocks

Seagate Technology (STX) raised its revenue outlook for the upcoming quarter, sending its shares up by 4.72%. This surge is part of a broader rally among AI-related stocks.

Seagate’s optimistic forecast is supported by expectations of increased demand for data storage driven by artificial intelligence. The company anticipates current-quarter revenue to be in the range of $3.45 billion, plus or minus $100 million.

This projection represents a year-over-year increase of approximately 40%, exceeding the consensus estimate of $3.13 billion according to analysts tracked by Visible Alpha.

Gianluca Romano, Seagate’s chief financial officer, stated, “AI is reshaping data into a strategic asset,” highlighting the significant role of AI in the company’s growth.

Alongside Seagate, shares of Sandisk (SNDK) and Western Digital (WDC) also rose, with WDC gaining 5.27% and SNDK climbing 3.04%. These companies are benefiting from the same AI-driven demand.

The rally in data storage stocks comes ahead of major earnings reports from tech giants like Alphabet (GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) later today.

Investors are keenly awaiting insights from these reports to assess how much tech companies plan to invest in AI capabilities. The renewed interest in AI technology has driven some data storage stocks to increase by as much as 3,000% over the last year.

Seagate also forecasted adjusted earnings per share of $5, plus or minus 20 cents, which is above analyst expectations. The details from the upcoming earnings reports could provide further clues on revenue potential for hardware providers.

Sandisk and Western Digital are scheduled to report their latest earnings after the market’s close on Thursday.