Seagate’s first quarter results were positively received by the market, reflecting robust demand from major cloud customers and operational improvements. Management attributed the strong performance to surging data center requirements, particularly from hyperscale and cloud service providers investing in artificial intelligence (AI) infrastructure. CEO Dave Mosley highlighted the company’s success in qualifying its Mozaic HAMR-based drives with two of the world’s largest cloud customers, noting that the platform’s maturity and execution were crucial in meeting accelerated customer timelines. The company also cited its disciplined pricing strategy and operational leverage as key contributors to margin expansion.
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Seagate (STX) Q1 CY2026 Highlights:
- Revenue: $3.11 billion vs analyst estimates of $2.95 billion (44.1% year-on-year growth, 5.4% beat)
- Adjusted EPS: $4.10 vs analyst estimates of $3.51 (16.8% beat)
- Adjusted EBITDA: $1.23 billion vs analyst estimates of $1.10 billion (39.6% margin, 11.7% beat)
- Operating Margin: 32.1%, up from 20% in the same quarter last year
- Inventory Days Outstanding: 84, in line with the previous quarter
- Market Capitalization: $165.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Seagate’s Q1 Earnings Call
- Erik Woodring (Morgan Stanley) asked how Agentic AI (AI that acts autonomously) changes demand for hard disk storage, and CEO Dave Mosley explained that these applications reference large datasets, driving higher storage needs for unstructured data like video.
- Asiya Merchant (Citigroup) questioned the pace and impact of cost reductions from the HAMR transition, and CFO Gianluca Romano pointed to rapid mix shifts and minimal bill-of-material changes as primary cost drivers, with Mozaic 4 expected to dominate shipments by year-end.
- Samik Chatterjee (JPMorgan) inquired about pricing trends and why they might not accelerate further, to which Romano replied that the company’s pricing is dictated by long-term agreements and disciplined execution, not by opportunistic short-term gains.
- Wamsi Mohan (Bank of America) asked about capital allocation priorities amid strong free cash flow, and Mosley said the focus remains on further debt reduction and increased share buybacks as debt levels decline.
- Timothy Arcuri (UBS) sought clarity on whether Seagate is growing unit shipments or just capacity per drive, and Mosley clarified that the strategy centers on increasing capacity per unit, not total units shipped.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) continued adoption and ramp-up of Mozaic 4 and the upcoming Mozaic 5 product lines, (2) the pace of cloud and AI infrastructure investments that drive exabyte demand, and (3) management’s ability to sustain cost reductions and pricing discipline amid a dynamic supply chain. Progress in expanding into new end markets such as edge and IoT storage will also be key signposts.
Seagate currently trades at $737.51, up from $579.03 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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