AI Storage Demand Explodes: Seagate Tech's Q4 Revenue Surges Nearly 50%, Beating Expectations with Stronger Guidance; Shares Gap Up After Hours | Earnings Watch
Seagate shares, which had closed down 8.5%, surged more than 10% in after-hours trading. Updating
U.S. memory chip stocks, which have suffered sharp declines in recent days, received good news: Seagate Tech delivered fourth-quarter results and current-quarter guidance that significantly exceeded Wall Street expectations, reflecting exploding demand related to AI.
On Tuesday, the 28th (U.S. Eastern Time), Seagate announced that for its fourth fiscal quarter ended July 3, 2026, revenue increased by nearly 49% year-over-year to $3.65 billion, approximately 4.6% higher than analysts' expectations. Adjusted earnings per share (EPS) for the quarter surged about 120% year-over-year to $5.71, beating market expectations by 12.4%.
The financial report showed that Seagate did not just "beat revenue expectations"; its profit margins also significantly outperformed. The adjusted operating margin for the fourth fiscal quarter reached 44.6%, higher than the analyst expectation of 41.9%. This indicates that the company's earnings elasticity is being rapidly amplified due to recovering demand for high-capacity storage, improved product mix, and supply discipline within the industry.
Seagate's guidance for the current quarter further ignited market sentiment. The company expects revenue for the first fiscal quarter of 2027 to be between $4.0 billion and $4.2 billion, with a midpoint of $4.1 billion, approximately 8.2% higher than analysts' expectations. It forecasts adjusted EPS of $7.30 for the first quarter, 24.8% higher than Wall Street expectations. This suggests that the surge in AI storage demand is not a one-quarter phenomenon but may be entering a more sustained upward cycle.
Before the earnings release, Seagate's stock closed down about 8.5% during regular trading hours on Tuesday. After the announcement, shares quickly gap up in after-hours trading, with gains exceeding 10% at one point. Boosted by Seagate's strong earnings, U.S. memory-related stocks rose collectively in after-hours trading: Western Digital rose more than 6%, SK Hynix ADR gained over 3%, SanDisk rose more than 2%, and Micron Technology increased by over 1%.
