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Seagate Surges on AI Data Demand Boom
29 Apr
Summary
- Seagate forecasts Q4 revenue and profit exceeding Wall Street estimates.
- AI adoption is fueling demand for data-storage hardware.
- Company shares rose approximately 16% in extended trading.
Seagate Technology has projected fourth-quarter revenue and profit figures that are expected to exceed Wall Street's predictions. This optimistic forecast is primarily attributed to a significant increase in demand for data-storage hardware, driven by enterprises accelerating their adoption of artificial intelligence technologies.
As companies integrate AI to enhance operational efficiency and reduce costs, there's a concurrent rise in investments in robust storage solutions. This is necessary to manage the immense volumes of data crucial for developing and operating advanced AI models.
The surge in memory chip prices has further invigorated investor sentiment within the storage market. Seagate's stock performance reflects this enthusiasm, having already seen substantial growth year-to-date.
For the fourth quarter, Seagate anticipates revenue between $3.35 billion and $3.55 billion, surpassing the $3.16 billion expected by analysts. The company also projected adjusted earnings per share of $4.80 to $5.20, significantly higher than the consensus estimate of $3.97.
In the third quarter, Seagate reported revenue of $3.11 billion, exceeding the $2.96 billion estimated by LSEG data. Earnings per share stood at $3.27, a notable increase from $1.57 in the same period last year.
