AI Data Surge: HDD Leader Achieves Record Margin and Cash Generation

Seagate Technology Holdings plc (STX) announced that in the third quarter of fiscal 2026 it posted revenue of $3.11 billion, a 44% year-over-year increase (approximately KRW 4 trillion), achieved record-high gross and operating margins, reported non-GAAP diluted EPS of $4.10, and generated free cash flow of $953 million (around KRW 1 trillion).

Using this cash, the company repaid $641 million of debt (about KRW 800 billion) and returned $191 million (roughly KRW 200 billion) to shareholders through dividends and share repurchases. Seagate also announced a quarterly dividend of $0.74 per share payable on July 7, and provided guidance for fiscal Q4 revenue of approximately $3.45 billion (mid-KRW 4 trillion range) with non-GAAP EPS of about $5.00.

In early May, Seagate disclosed that its chief technology officer and a director sold several million dollars’ worth of shares (tens of billions of won) under a pre-established 10b5-1 trading plan and through discretionary open-market transactions, partially reducing their holdings.

Following the earnings release on May 4, STX shares rose as much as 1.5% intraday on Nasdaq. On Wall Street, analysts have been raising Seagate’s earnings estimates and price targets in response to expected growth driven by AI and data-center demand.

In March, Seagate unveiled the industry’s first HAMR-based “Mozaic 4+” hard-disk platform with up to 44 TB capacity and began shipments to select hyperscale cloud customers. The company’s chief commercial officer characterized the storage-price increases fueled by the AI data-center boom as the “new normal,” saying the storage industry is entering an unprecedented supercycle.

Founded in the late 1970s, Seagate is a global leader in data-storage manufacturing, supplying high-capacity hard disk drives, SSDs, storage systems, and cloud-connected solutions to data centers as well as PC and consumer markets worldwide.

The hard-disk industry is an oligopoly dominated by a few companies, including Seagate and Western Digital. While it stands to benefit from the data explosion driven by cloud computing and AI, it remains sensitive to economic cycles and IT capital-spending trends.