Company Profile
Founding
Seagate Technology (ticker: STX) was founded in California in 1979 and launched its first 5.25-inch hard drive in 1980.
Business
Currently, Seagate’s main products include desktop hard drives, enterprise hard drives, laptop hard drives, and micro drives. Its first hard drive product had a capacity of 5MB.
IPO
Seagate Technology first went public in 1981. However, the company was privatized in 2000 and re-entered the public market through an initial public offering (IPO) on December 11, 2002.
Products
Traditional Mechanical Hard Drives
- Barracuda: A 3.5-inch, 7200 rpm hard drive for desktop users.
- Skyhawk: Primarily a surveillance hard drive.
- Ironwolf: Primarily a NAS hard drive.
- EXOS X, E: Primarily an enterprise hard drive. Firecuda: Primarily for gaming hard drives.
- Nytro: SSD products.
- Others: Mobile hard drives, etc.
- Mobile hard drives
Solid state drives
Regarding solid state drives, Seagate believes that traditional hard drives remain the mainstream. In November 2008, the company announced a $100 million R&D investment in related products. Currently, Seagate is focusing on SSDs that combine SLC and MLC chips; the former offers better performance, while the latter offers a lower cost per chip.
The Evolution of Hard Drives
In Sync with the History of Personal Computers
The history of hard drives dates back to the 1950s: Back then, products could only store 5 terabytes of data and weighed over 2,000 pounds (about 907 kilograms). Today, hard drives in personal computers can hold up to 2 TB of data and weigh just 1.5 pounds (about 0.68 kilograms) or less. Its history has almost paralleled the evolution of personal computers, and its revenue, of course, relies on computer shipments.
Solid-state drives are eroding mechanical hard drives
Solid-state drives are changing the fate of mechanical hard drives. Traditional hard drive manufacturers have long played a vital and indispensable role in the personal computer industry. However, with the advent of solid-state drives, PC shipments have almost entirely abandoned traditional hard drives, significantly reducing the revenue of traditional hard drive manufacturers like Seagate Technology.
Rebirth due to artificial intelligence and data centers
First came cloud computing, then artificial intelligence, both of which require the construction of large data centers. Cloud computing and artificial intelligence manufacturers have always focused on large-scale storage solutions—which is precisely the key to training large language models: the training process of such models requires processing large amounts of data.
Storage devices are the most important components of a data center. Solid-state drives are fast, but due to considerations of lifespan and storage space cost, mechanical hard drives are regaining favor. This is why artificial intelligence and data centers are said to have saved the mechanical hard drive, allowing mechanical hard drive manufacturers to make a comeback.
Operational Status
Outlook
Seagate’s revenue is expected to grow 16% in fiscal year 2026 (ending in June of the following year), down from a 39% increase in fiscal year 2025. Western Digital, whose reporting cycle aligns with Seagate’s, expects a 27% sales decline in fiscal year 2025 and a 16% revenue increase in the current fiscal year. Of the three, next year’s growth is projected to be 3% and 9%.
Acquisitions
In May 2006, Seagate Technology acquired Maxtor, another hard drive manufacturer.
On April 19, 2011, it announced the acquisition of Samsung Electronics’ hard drive business for $1.375 billion.
In 1996, the company acquired Conner Peripherals, a hard drive company founded in 1986 by Finis Conner, one of Seagate’s original founders.
Competitors
Seagate Technology has only one major competitor: Western Digital.
Capital Market Performance
Valuation
Traditional hard drive manufacturers have long been undervalued in the stock market. This was especially true after the advent of solid-state drives (SSDs), which have largely eliminated traditional hard drives from PC shipments. This pushed traditional hard drive manufacturers like Seagate Technology’s price-to-earnings ratios down to single digits.
Stock Performance
Seagate Technology, a manufacturer of computer hard drives (HDDs), saw its stock price surge 156% since 2025 as of September 19th, making it the best-performing stock in the S&P 500.
Risks
Traditional hard drive manufacturers, due to their cyclical nature and relatively low investor attention, have historically been among the lowest-valued stocks in the S&P 500. While all three companies are currently profitable, each has experienced annual losses in the past three years, calculated using US Generally Accepted Accounting Principles (GAAP).
At the beginning of 2025, Western Digital’s forward price-to-earnings ratio (price to estimated earnings) was less than 6 times, while Seagate’s was only about 10 times.
Historically, valuations for any cyclical company typically dip during peak performance and bottom out during losses. Therefore, the best time to buy is when the industry cycle reverses and the company falls into losses. When valuations appear “healthy,” it’s often a sell signal.
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