1. Seagate Technology Holdings plc (NASDAQ:STX)
P/E Ratio: 9.56
Hedge Fund Holders: 11
Seagate Technology Holdings plc (NASDAQ:STX) is a global pioneer in data storage solutions, offering hard disk drives, solid-state drives, and storage systems for the cloud, edge, and business markets worldwide. Seagate, founded in 1978 and based in Singapore, is a key player in facilitating digital transformation by providing scalable storage infrastructure to support today’s tremendous data growth.
Seagate Technology Holdings plc (NASDAQ:STX) ended calendar 2024 with solid momentum, growing revenue by 7% sequentially and posting non-GAAP earnings per share above $2 for the first time in 12 quarters. Seagate’s nearline product revenue nearly doubled year-over-year, due to strong demand, particularly from cloud clients. Mass capacity products continue to drive growth, with nearline shipments up 9% sequentially to 140 exabytes. Total December quarter revenue was $2.33 billion, with non-GAAP gross margin increasing by 220 basis points to 35.5%, representing the seventh consecutive quarter of sequential increase.
Seagate Technology Holdings plc (NASDAQ:STX) is benefiting from the ramp of its Mozaic HAMR-based platform, which has industry-leading capacities of up to 36 terabytes. Multiple cloud and hyperscale clients have already qualified these drives, paving the way for a considerable volume increase in the latter part of 2025. Management anticipates GenAI applications to be a long-term driver of mass capacity storage development, with AI-generated data expected to increase 170 times between 2024 and 2028.
Seagate Technology Holdings plc (NASDAQ:STX) also finalized the strategic acquisition of Intevac for about $96 million on March 31, 2025, which will boost its thin-film production capabilities. Meanwhile, the company continued its focus on capital discipline, generating $150 million in free cash flow and retiring $479 million in debt in early January, leaving no significant obligations until late fiscal 2027.
Despite temporary supply difficulties in the March quarter, Seagate Technology Holdings plc (NASDAQ:STX) is still well-positioned, with robust customer demand and an attractive technology roadmap. Given its critical position in facilitating AI-driven mass storage needs, Seagate appears to be an overlooked tech stock poised to benefit from the next wave of data expansion.
Overall, Seagate Technology Holdings plc (NASDAQ:STX) ranks first on our list of the overlooked tech stocks to buy now. While we acknowledge the potential of STX, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than STX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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