Results for the third fiscal quarter of 2026, which ended on April 3, 2026, showed a very significant acceleration in growth. Seagate reported revenue of $3.112 billion compared to $2.160 billion a year ago, a GAAP gross margin of 46.5% compared to 35.2% a year ago, and an adjusted gross margin of 47% compared to 36.2% in the same period last year. Adjusted net income rose to $934 million from $407 million, and adjusted operating income reached a margin of 37.5%, confirming that the company is growing not only in volume but also in terms of profitability.[1]

Where the growth came from

The main driver of growth is the continued demand for data storage as companies accelerate investments in artificial intelligence and expand their data infrastructure. Seagate is benefiting from robust demand for data storage solutions as businesses increasingly deploy AI, driving the need to store, manage, and move massive volumes of data. This is a significant shift for investors as well, because the AI narrative no longer rests solely on computing chips but increasingly on the companies that provide the physical layer of the data economy.[2]

Margins and cash

Perhaps even more interesting about Seagate’s results is how significantly its ability to convert revenue growth into cash has improved. In the third quarter, the company generated $1.1 billion in operating cash flow and $953 million in free cash flow, while repaying approximately $641 million in debt and returning $191 million to shareholders through dividends and share buybacks. At the end of the quarter, the company had $1.1 billion in cash and cash equivalents, indicating that the optimistic outlook is not based on a weak balance sheet or aggressive debt issuance.1

The outlook shifted sentiment

It was the outlook for the next quarter that most significantly shifted market sentiment. Seagate expects revenue of approximately $3.45 billion, which is significantly above the consensus estimate of $3.16 billion, and adjusted earnings per share of around $5, while analysts had anticipated $3.97 prior to the earnings release. Seagate’s optimistic commentary also boosted the broader data storage sector and reinforced investor confidence that corporate spending on AI infrastructure remains strong even after the sharp rise in tech stocks.[3] [1]

Outlook shifted sentiment

Another key aspect of Seagate’s results is that the market immediately validated them. Following the release of the quarterly figures and the optimistic outlook, the company’s shares rose by approximately 16%* in after-hours trading, as investors appreciated not only the strong results for the past quarter but, above all, the significantly improved outlook for the coming period. Even before these results, Seagate shares were among the year’s top performers, having nearly doubled in value since the start of the year after more than tripling in price in 2025.2

Seagate’s stock price performance over the past five years*

What the market will be watching

The coming months will be crucial for Seagate, particularly in terms of whether the company can confirm that today’s acceleration is sustainable beyond a single strong quarter. According to its earnings summary, Seagate expects year-over-year revenue growth of approximately 41% in the middle of the range for the next quarter, while also indicating that the adjusted operating margin should be in the lower 40% range, a level that would have seemed very ambitious just a year ago. If the company meets this outlook, Seagate could definitively shift, from an investor’s perspective, from the category of a traditional storage manufacturer to the group of companies that have become direct beneficiaries of the new wave of investment in AI infrastructure.[4] [2]

[1,2] Forward-looking statements are based on assumptions and current expectations that may prove to be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.

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CAPITAL MARKETS, o.c.p., a.s. is a securities dealer pursuant to Section 55(1) of Act No. 566/2001 Coll. on Securities and Investment Services and on Amendments and Supplements to Certain Acts, as amended (hereinafter the “Securities Act”). On October 30, 2007, CAPITAL MARKETS, o.c.p., a.s. was granted, by Decision No. OPK-2297/2007 of the National Bank of Slovakia-PLP, a license to provide investment services pursuant to Section 54(2) in conjunction with Sections 59(2) and (3) of the Securities Act, which was extended in accordance with the provisions of the Securities Act by Decision No. OPK-1830/2008-PLP dated April 21, 2008, Decision No. OPK-11601-1/2008 dated January 28, 2009, Decision No. ODT-5059-3/2012 dated July 23, 2012, and Decision No. ODT-9332/2014-1 dated October 21, 2014.

* Past performance is no guarantee of future returns.

[1] https://www.marketscreener.com/news/seagate-technology-reports-fiscal-third-quarter-2026-financial-results-ce7f59d2d18cfe25

[2] https://www.reuters.com/business/seagate-forecasts-upbeat-quarter-ai-boom-powers-strong-data-storage-demand-2026-04-28/

[3] https://www.reuters.com/business/storage-stocks-jump-seagates-upbeat-forecast-fuels-confidence-ai-spending-2026-04-28/

[4] https://finance.yahoo.com/markets/stocks/articles/seagate-technology-q3-earnings-call-233908301.html