What Happened?

Shares of data storage manufacturer Seagate (NASDAQ: STX) fell 5.4% in the afternoon session after the company provided a weaker-than-expected forecast for the upcoming quarter, which overshadowed its strong fourth-quarter earnings report. While the data storage manufacturer's quarterly revenue and profit both topped analyst estimates, its guidance for the first fiscal quarter of 2026 fell short. Seagate projected revenue with a midpoint of $2.5 billion and adjusted earnings per share of $2.30, both below consensus expectations. This outlook raised concerns as it suggested a potential sequential decline from the strong quarter the company just delivered. The disappointing forecast prompted investors to sell, especially since the stock had already surged significantly year-to-date, making it prone to profit-taking on any sign of weakness.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Seagate Technology? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Seagate Technology’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock gained 9.2% on the news that the company reported fourth-quarter results that blew past analysts' EPS expectations, while revenue was roughly in line. 

On the other hand, its revenue and EPS guidance for the next quarter fell below consensus estimates, indicating expectations were on the high side ahead of the earnings release. However, taking a closer look at the results, top-line growth accelerated during the quarter, up 49.5% y/y, driven by what management considers "structural improvements in the business and our focus on value capture in an improving demand environment," including some of the company's AI bets. 

Overall, this was a mixed yet decent quarter. Following the results, Benchmark upgraded the stock's rating from Hold to Buy, adding, "While a supply constraint is expected to impact the March quarter, we see continued strong cloud demand along with growing AI business driving results in 2H25 and 2026, where we project non-GAAP earnings growing 25% y/y to $9.96/share.".

Seagate Technology is up 70.3% since the beginning of the year, and at $147.15 per share, it is trading close to its 52-week high of $152.76 from July 2025. Investors who bought $1,000 worth of Seagate Technology’s shares 5 years ago would now be looking at an investment worth $3,314.

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