Seagate Technology (STX) popped 11% on Wednesday as the data storage provider reported market-beating results for the third quarter of Fiscal 2026. The company’s solid performance and outlook reinforced bullish views on robust AI spending on storage and memory. Shares of Western Digital (WDC), Micron (MU), and SanDisk (SNDK) rose about 6%, 3%, and 6%, respectively.
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New trading tool for STX bullsSeagate Delivers Impressive Q3 Earnings Beat
Seagate’s Q3 FY26 revenue grew 44% year-over-year to $3.11 billion, exceeding the Street’s estimate of $2.96 billion. Notably, the data center market accounted for 88% of the company’s exabyte shipments and 80% of revenue, with strong demand from cloud and enterprise customers.
Furthermore, adjusted EPS (earnings per share) surged about 116% from the prior-year quarter to $4.10, way ahead of the Street’s consensus of $3.52. Seagate’s gross margin expanded to 47% in Q3 FY26 from 42.2% in the year-ago quarter, with the company attributing this improvement to continued execution of its long-term pricing strategy and enhanced product mix.
Looking ahead, Seagate expects Q4 FY26 revenue in the range of $3.45 billion, plus or minus $100 million, representing 41% year-over-year growth at the midpoint. The company projects adjusted diluted EPS in the range of $4.80 to $5.20. Analysts were expecting adjusted EPS of $3.99 on revenue of $3.16 billion.
“We believe Seagate is entering a new era of structural growth as AI applications amplify data creation and support sustained storage demand,” said Seagate’s CEO Dave Mosley.
Mizuho Raises Price Target for STX Stock
Following the Q3 FY26 print, Mizuho analyst Vijay Rakesh increased his price target for Seagate Technology stock to $700 from $565 and reaffirmed a Buy rating. The 5-star analyst noted the company’s solid results and better-than-expected guidance for the June quarter. Rakesh highlighted robust hyperscaler demand with Q3 FY26 nearline exabytes up 6% sequentially and momentum continuing into the June quarter.
Rakesh also noted a 480-basis-point expansion in Q3 FY26 gross margin to 47%. He expects Seagate’s June quarter gross margin to increase to more than 50% (all-time high), reflecting more than 1,200 basis points year-over-year jump, with continued solid pricing and mix.
The analyst added that Seagate’s Mozaic 3 offering is ramping with all major U.S. cloud service providers (CSPs), while Mozaic 4 qualified at the two largest CSPs and is ramping in Q4 FY26. Rakesh’s new price target is based on about 29x his Fiscal 2027 EPS estimate, driven by expectations that HAMR (heat-assisted magnetic recording) adoption will boost profitability as hyperscalers ramp.
Is Seagate a Good Stock to Buy?
With 14 Buys and three Holds, Seagate Technology stock earns a Strong Buy consensus rating. The average STX stock price target of $697.47 indicates 8.4% upside potential. STX has rallied 134% year-to-date.
