Seagate Technology on Tuesday set fourth-quarter targets for revenue and adjusted profit that surpassed market forecasts, attributing the upbeat outlook to heightened enterprise spending on storage as companies deploy artificial intelligence. The stock reacted positively, trading about 10% higher in extended trading following the updated guidance.
Executives said customers moving to integrate AI into business processes have also invested in storage capacity to support the large data sets required to train and run modern models. That demand backdrop underpins Seagate's confidence despite a crowded supplier field.
Guidance and recent results
For the fiscal fourth quarter, Seagate projected revenue of $3.45 billion, plus or minus $100 million. That range compares with consensus estimates of $3.16 billion compiled by LSEG. The company also forecast adjusted earnings per share of $5.00, plus or minus $0.20, versus analysts' expectations of $3.97.
Seagate reported third-quarter revenue of $3.11 billion, above consensus of $2.96 billion, and posted earnings per share of $3.27, up from $1.57 a year earlier.
Market reaction and broader drivers
Investors have rewarded Seagate this year amid an AI-led surge in demand for data-storage hardware. The company's shares have doubled so far this year after more than tripling in 2025, reflecting enthusiasm about storage market prospects and a related jump in memory chip prices. According to Counterpoint Research data from February, memory chip prices rose between 80% to 90% sequentially in the first quarter of this year.
Still, Seagate operates in a highly competitive market. Rivals such as Western Digital are accelerating capacity build-outs and production increases to capture cloud-provider contracts, intensifying the race for large-scale customers.
What this means for markets and sectors
- Storage hardware and data-center supply chains are central to the demand story as enterprises scale AI deployments.
- Memory chip price movements are a notable dynamic tied to sector margins and investor sentiment.
- Competition among storage suppliers and cloud-provider procurement will shape contract wins and capacity allocation.
This guidance positions Seagate ahead of consensus for the quarter, reflecting management's assessment of sustained enterprise spending on the storage needed for AI workloads. At the same time, competitors' capacity expansions and the volatility in memory pricing remain elements that market participants are watching closely.